Philadelphia Office Market
Quarterly absorption in the third quarter of 2023 for Greater Philadelphia was -649,808 square feet. The suburbs and city contributed around 57% and 43% of negative absorption, respectively. The Blue Bell/Plymouth Meeting submarket was the largest laggard this quarter, posting an occupancy loss of -207,395 square feet. A combination of sublease space term expiring and large sublease deals around the market caused sublease availability to decrease for the first time in the post-pandemic era. The 5.7% sublease availability rate was a 20-basis point decline quarter-over-quarter. Asking rate declines in the suburban markets have begun to show. The $29.50/SF rate in the third quarter is $0.18/SF lower year-over-year.
Download Philadelphia Office Market Report 3Q23Philadelphia Industrial Market
Absorption in the third quarter totaled 505,795 square feet, which brought year-to-date absorption up to 2.4M square feet. This is just over 20% of year-to-date absorption in the third quarter of 2022. Fourteen buildings totaling 5.5M square feet delivered in the third quarter. The construction pipeline is 17.4M square feet, 22.7% less than the pipeline in the third quarter of 2023. Vacancy and rents both increased year over year. Vacancy grew to 5.5% as deliveries outpaced absorption. Higher-priced deliveries caused rents to rise slightly, as the $11.34/SF average rate was 1.2% higher than last year’s average.
Download Philadelphia Industrial Market Report 3Q23