Philadelphia I-81/78 Corridor Industrial Market
Quarterly absorption registered 490,481 square feet during the third quarter, counteracting some of the negative absorption registered earlier in the year to bring the region’s year-to-date absorption total to negative 863,786 square feet. Much of the negative absorption in 2025 was due to Big Lots bankruptcy, which led to vacating 1,295,000 square feet at 50 Rausch Creek Road during the second quarter. Excluding this one-time event, the region would have positive year-to-date absorption. Despite the impact, this quarter’s vacancy rate of 8.1% remains on par with the long-term average. Construction starts ticked up in the third quarter of 2025, with nearly 3.9 million square feet of projects breaking ground. Major projects that broke ground this quarter include Panattoni’s 1.2-million-square-foot Southern Berks Industrial Park in Lehigh Valley and Phase 1 of Crossroads East Business Park, a 450,000-square-foot Warehouse property in Northeastern PA slated for delivery at the end of 2026. Average asking rents grew 2.0% over the past year to average $8.66 per square foot as of the third quarter. The increase was driven primarily by the 3.4 million square feet of new deliveries in 2025, which have a weighted average asking rate of $11.65 per square foot, reflecting the heightened demand for new high-quality space within the market.