Philadelphia Office Market
During the second quarter of 2025, leasing activity totaled approximately 1.3 million square feet, which is below the five-year quarterly average of 1.9 million square feet. This represents a softer start to the year compared to recent historical trends. During the second quarter, the Greater Philadelphia market experienced negative net absorption of 177,694 square feet. Conshohocken and Bucks County emerged as the most active submarkets for space absorption this quarter, recording total net absorption of 63,201 square feet and 24,910 square feet, respectively. This strong performance highlights sustained demand in these areas, further reinforcing their appeal to tenants within the Greater Philadelphia region. The only office property that remains under construction in the Greater Philadelphia office market is the Chubb Insurance Headquarters (478,800 SF), which is projected to deliver in early 2026. This quarter, one notable life science building was delivered: 3151 Market Street, comprising 478,800 square feet of new space. Meanwhile, two additional life science developments remain under construction—2300 Market Street (220,000 SF) and 3201 Cuthbert Street (582,007 SF). Both projects are on track to be completed and delivered to the market in the upcoming quarter, adding significant inventory to Philadelphia’s growing life sciences sector.
Download Philadelphia Office Market Report 2Q25Philadelphia Industrial Market
The industrial construction pipeline has declined significantly, with 9.8M square feet at the end of the second quarter of 2025, a 3.4M square foot decrease from the previous year. A notable share of the decrease in the construction pipeline is the result of planned industrial developments at the Keystone Trade Center being redirected for data center use. Over the last 8 quarters, there has been an average of just under 3.2M square feet of quarterly deliveries. This reduction aligns well with the current slowdown in demand for new bulk facilities. Sublease availabilities declined to 3.1M square feet. Southern New Jersey accounts for 1.3 million square feet of sublease space—41.3% of the market’s total—despite making up only 28.2% of the region’s overall inventory. After annual declines in rents in 2024, asking rates have now risen by 5.5% to reach their all-time high of 11.78/SF. Growth in asking rents has mainly been fueled by the availability of Class A warehouse space. At present, approximately 18.8 million square feet of Class A warehouse inventory is on the market, with average asking rents reaching $12.66 per square foot. This trend underscores the continued strong demand for high-quality, modern industrial facilities.
Philadelphia Multifamily Market
Greater Philadelphia’s multifamily occupancy rate was 96.7% as of the second quarter of 2025. The elevated occupancy rate is driven by robust employment growth coupled with a constrained housing market, where high interest rates continue to deter single-family home purchases. Philadelphia stands out among major U.S. cities for its sustained affordability, particularly when evaluating the relationship between average income and cost of living. In the current year, Philadelphia reports an average annual salary of $81,333 alongside a cost-of-living index of 102.8, which translates to annual living expenses of approximately $30,889. This combination yields a purchasing power of $79,130—an impressive $4,949 above the national average. In contrast, cities such as New York have a much higher cost-of-living index at 169.6 with annual expenses surpassing $50,900, making Philadelphia a notably more budget-friendly place to live. With a favorable salary-to-cost-of-living ratio of 2.63, Philadelphia residents enjoy a comfortable lifestyle without the financial strain often experienced in other major metropolitan areas.