Health district moving to West Palm
The taxing district last month signed a lease at the Flagler Waterview building at 1515 N. Flagler Drive.
The Health Care District of Palm Beach County plans to move out of its offices in Palm Springs and into 42,000 square feet of waterfront space in West Palm Beach this year.
The taxing district last month signed a lease at the Flagler Waterview building at 1515 N. Flagler Drive. The deal marks Palm Beach County’s largest office lease of 2016, said Neil Merin, a broker at NAI/Merin Hunter Codman who represented the Health Care District.
The water views and $30-asquare-foot lease rate are a step up from the district’s unremarkable space west of Interstate 95, where it pays $22 a foot. But because the district is downsizing from nearly 57,000 square feet, its overall occupancy costs will fall a bit, from $1.4 million a year in Palm Springs to $1.3 million in West Palm Beach.
“We have been paying for significantly more space than we need,” said Chief Executive Darcy Davis.
In September, the Health Care Di s t r i c t s ai d i t was considering Flagler Waterview and four other office buildings at West Palm Beach. At the time, Flagler Waterview’s price of $32.78 per square foot was the second-most expensive among the properties it was considering. But the Health Care District later negotiated nine months of free rent worth nearly $1 million. That brought the price per square foot down to $30.
“We beat ’em up pretty good,” Merin said.
The landlord is kicking in nearly $2.5 million to renovate a for- mer MRI clinic and gynecology office that occupied the space. The Flagler Waterview building also is home to a federal bankruptcy court.
The property’s loan was on the verge of default as recently as 2015.
More than 200 employees will move into the West Palm Beach offices as early as May, Davis said. The Health Care District has asked the city to extend trolley service to the building, which is just north of Good Samaritan Medical Center.
The district in 2015 sold its building on 10th Avenue North for $6.9 million and has been leasing space there.
One of advantage of the new space: All of the Health Care District’s employees will be on one floor. In Palm Springs, workers were divided among two stories, a setup that hampered communication, Davis said.
The district’s search for space offers a glimpse into West Palm Beach’s office market. The agency looked at 15 locations in West Palm Beach and ruled out 10 buildings because they didn’t have enough space or were poorly located.
The Health Care District also looked at One Clearlake Center in West Palm Beach, where rents were $33.59 a square foot, the Courthouse Commons building in downtown West Palm Beach ($30.15 a square foot) and the Sabadell Bank building near the Palm Beach Outlets ($28.68 a square foot). All offered 180 to 197 parking spaces.
Measured by total costs over the life of the lease, the Flagler Waterview space was only slightly more expensive than the Sabadell Bank space and cheaper than the other options, the district said.
Among other ser vices, the Health Care District runs Lakeside Medical Center and the Edward J. Healey Rehabilitation and Nursing Center.