Philadelphia Office Market
Greater Philadelphia’s office market ended 2025 with positive momentum in select indicators. The leasing landscape is more favorable, with sublease availabilities having stabilized and asking rents recording three consecutive quarters of gains. Following five years of significant occupancy losses, totaling 7.1 million SF from 2020 to 2024, net absorption was only slightly negative in 2025 throughout the Greater Philadelphia office market. The improvement of net absorption trends bodes well for the region’s recovery over the next several quarters. The delivery of 3201 Cuthbert Street, an office and laboratory building in University City, kept vacancies elevated in Philadelphia’s CBD market. A lack of new construction and moderately negative net absorption kept suburban vacancies flat over the quarter.
Download Philadelphia Office Market Report 4Q25Philadelphia Industrial Market
Industrial leasing activity in Greater Philadelphia reached its highest level in two years, with the fourth quarter at 6.6 million SF, representing the strongest quarter. Class A industrial properties continue to capture a disproportionate share of local transaction volume. Class A properties captured 40.9% of leasing volume despite representing only one-third of inventory, driven by demand for higher clear heights, wider column spacing, and greater power capacity. Five major fourth-quarter transactions—led by DrinkPAK (1.4M SF), Cirro (750,000 SF), and Amazon (613,000 SF)—demonstrate strong underlying tenant demand. Southern New Jersey sublease availability (1.1 million SF) remains elevated but improving, with availability rate declining 30 basis points in the fourth quarter of 2025.
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.