Demand for office space in the Philadelphia market shrunk slightly during the first quarter, as reported in Newmark Grubb Knight Frank’s newly released Q1 Philadelphia office trend report. But, owner-user transactions that took vacant buildings out of the office statistical set actually pushed overall vacancy down 20 basis points to settle at 16.7%. In the CBD alone, over two million square feet of space has been purchased for conversions or owner-user purposes since 2005, offsetting that market segment’s additions of nearly the same amount of new product brought to market at Cira Centre North and Comcast Center during that same time frame.
Asking rents moved laterally in the first quarter but posted varying performances by class and geography where tighter Class A markets such as University City, Bala Cynwyd and Radnor/Main Line enjoyed rent growth. Other submarkets and classes generally saw rents hold flat or move downward as higher vacancies continued to stall rent growth throughout the greater market.
Key statistics for the Philadelphia office market during the first quarter of 2013 are as follows:
• Vacancy Rate: 16.7%
• Absorption: -73,672 square feet
• Average Asking Rent: $25.03/SF full service
• Class A Asking Rent: $28.36/SF full service
Looking forward, expect demand growth to temper given that traditional office occupying sectors posted minimal growth to slight losses in employment over the past few months. Large scale demand deterioration is not likely as future employment performance is not expected to deteriorate significantly over the short term.
To access the full Philadelphia office report, visit /research. To speak with a NGKF local market expert, please contact Mira Matic at firstname.lastname@example.org.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, Newmark Grubb Knight Frank’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.