I-81/78 Corridor Market Reports

Philadelphia I-81/78 Corridor Industrial Market

Activity in the I-81/78 industrial market remains robust. Taking rents are expected to stay elevated as demand by tenants in search of space persists. Compared to 2021, demand has decreased a bit; however, it has not negatively impacted the market, as occupancy in all three tracked submarkets remains solid. Areas continue to become more land-constrained, particularly in the Lehigh Valley. More spillover is expected to occur in the Northeastern and Central Pennsylvania submarkets as we move toward the end of the year and into 2023. Vigorous construction activity is still a prominent trend, with nearly 30 million square feet currently under construction. With demand slowing, it will be interesting to monitor how much of the available speculative space coming online will be pre-leased before completion. Land prices continue to rise to peak levels as tenants and developers seek the best available space options close to their consumers.