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Philadelphia Market Reports

Philadelphia Office Market

Average Asking Rent (Price/SF) $29.43
Vacancy Rate (%) 13.8%
Net Absorption (SF) 5,358

In the second quarter of 2019, new supply was at the forefront of the Philadelphia commercial real estate conversation. Across the suburbs and Central Business District (CBD), new office construction projects and major redevelopments were announced, and multiple large-block tenants were poised to officially ink deals precipitating the groundbreaking of significant build-to-suits. While the large-block tenant stratum was active in decision-making during the past three months, the volume of tenants coming to market with space requirements in the small-to-midsize range tapered as the quarter drew to a close. This is likely a function of seasonal vicissitudes with high summer around the corner, but nevertheless, something to watch as national economic growth is slowing.

Philadelphia Industrial Market

Average Asking Rent (Price/SF) $6.33
Vacancy Rate (%) 5.1%
Net Absorption (SF)   1,794,671

Average asking rents for industrial space leapt to an all-time high in the Greater Philadelphia industrial market during the second quarter of 2019, precipitated almost entirely by dramatic rate increases in the R&D/flex sector. The construction pipeline increased by 2.4 million square feet as new product broke ground across Southern New Jersey and Greater Philadelphia markets, and only one project delivered. Quarterly net absorption totaled 1.8 million square feet and was mainly driven by occupancies in recently completed warehouse space. Market-wide vacancy, down 30 basis points from the first quarter at 5.1%, is expected to hover in the low 5.0% range through the rest of the year, while pent-up demand in the market for modern logistics space continues to absorb new additions to the inventory. Yet, only 34.0% of the current construction volume is preleased, so some developers with proposed projects in submarkets with significant development already underway may delay new groundbreakings to see how the market reacts as space delivers.

Philadelphia Office Market Report
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Philadelphia Industrial Market Report
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