Philadelphia Office Market
Absorption for the Greater Philadelphia market was 158,335 SF, marking the first instance of positive absorption since the third quarter of 2022. The occupancy gains in Center City were primarily driven by Morgan Lewis and Digitas, who occupied 2222 Market Street and The Bourse Building, respectively. Greater Philadelphia’s vacancy eclipsed 20% for the first time on record at the end of 2023. A 20.1% vacancy rate was a 20-basis point increase quarter-over-quarter and 120 basis points higher since 2022. Asking rates remained steady at the end of the year. The $31.39/SF average is $0.05/SF higher than 3Q23’s. Throughout 2023, asking rates for the market have consistently stayed within the $31.35-$31.40/SF range.
Download Philadelphia Office Market Report 4Q23Philadelphia Industrial Market
Absorption in Greater Philadelphia was 4.1M square feet in the fourth quarter of 2023, the highest quarterly total for the year and brought year-to-date absorption to 7.1M square feet. Over 1.9M square feet of the quarter’s 7.2M square feet of deliveries were leased at time of delivery, which boosted absorption totals. The market’s vacancy rate was 5.8% at the end of 2023, 70 and 190 basis points higher than the previous quarter and year, respectively. Much of the 19.8M square feet of deliveries throughout the year were unoccupied upon completion, leading to a surge in vacancy rates. The rapid addition of supply to a market previously supply–constrained has caused asking rate growth to moderate. Greater Philadelphia’s average asking rate was $11.68/SF at the end of the fourth quarter of 2023, virtually unchanged from the previous quarter.
Download Philadelphia Industrial Market Report 4Q23