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Philadelphia Office Space Market Update

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The center of economic activity in Pennsylvania, Philadelphia is known for its scrumptious cheesesteak and soft pretzels.  A city with more outdoor sculptures and murals than any other in the U.S., The City of Brotherly Love boasts a thriving mix of arts, culture, and ethnicity.  Sports teams abound, representing all the major leagues, including football, basketball, and baseball.

Philadelphia is home to several Fortune 500 companies, and economically represents information technology, manufacturing, food processing, and health care.  As there are many national historical sites within its borders, the city’s economy is also heavily represented by tourism. 

Its central location, exciting and emerging arts scene, sports teams, and affordably diverse neighborhoods makes Philadelphia a desirable urban city for over 1.5 million people.

The Philadelphia office market leasing activity increased in the first quarter 2013.  New construction is taking place in the educational, medical sectors, on a build-to-suit basis.  Suburban buildings are being renovated in place of new construction.  Many companies are opting to either downsize, or renew their existing leases.

Market

Vacancy Rate

Absorption (SF)

Avg Rent ($/SF)

CBD

13.5%

125,003

Class A - $28.65

Class B - $23.69

Bucks County

23.9%

214

Class A - $29.68

Class B - $21.86

Central/Delaware County

12.8%

-26,747

Class A - $28.30

Class B - $23.55

Exton/Malvern

21.7%

-120,748

Class A - $24.87

Class B - $23.85

*Source: Newmark Grubb Knight Frank 1Q 2013 Report

The expectation for the Philadelphia office market for 2013 leans towards a modest increase in leasing activity as the market continues to improve.  More robust growth is expected to materialize once the labor market recovers.

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By: James Osgood

Philiadelphia Office Space

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