Philadelphia I-81/78 Corridor Industrial Market
So far this year 3.1M SF of industrial space has been delivered. While this represents a 45.6% decrease compared to the average for the first half of the year since 2018, it is still a substantial increase over the first half of 2024, which saw only 590,402 SF of new deliveries. Quarterly absorption registered at -1,786,985 square feet this quarter. While this figure appears considerable, it’s important to note that approximately 73.2% of the negative absorption resulted from Big Lots’ bankruptcy. As a result of the bankruptcy, Big Lots vacated 1,295,000 square feet at 50 Rausch Creek Road. Despite this substantial negative absorption, the vacancy rate for the quarter remains within 15 basis points of the long-term average. Construction starts have accelerated rapidly since the beginning of 2025, fueled by nearly 5.3 million square feet of groundbreakings this quarter. Notable projects include Prologis’s development of 1.1 million square feet at 7600 Linglestown Road in Harrisburg and Matrix Development Group’s construction of a 900,000 square foot facility at 7000 United Drive in Shippensburg. Both properties remain fully available. The 7600 Linglestown Road project is scheduled for delivery in mid-2026, while 7000 United Drive is anticipated to be completed by the end of next quarter. Between the fourth quarter of 2024 and the second quarter of 2025, the annual average asking rent experienced an increase of 1.2%. The increase was largely fueled by greater overall availability in the Class A warehouse market, along with new construction deliveries scheduled for 2025. These new properties are commanding a weighted average asking rate of $13.32