Class A Apartment Market Philadelphia Metro Area: Fourth Quarter 2018

1/17/19

Rents increased across the metro area, with the West Philadelphia submarket being the only one where they decreased. Rents were above the long-term average in Southern New Jersey and the City of Philadelphia, but they remained slightly below the long-term average metro-wide. Vacancy decreased 40 basis points in the metro area, with Southern New Jersey experiencing the only increase. The pipeline of likely deliveries over the next 36 months in the City of Philadelphia remained elevated, increasing by 4%. In the city, absorption rose 25% over the year, with the Center City submarket accounting for 93% of the total.

FOURTH QUARTER 2018 HIGHLIGHTS

The metro area Class A stabilized vacancy rate decreased by 40 basis points from a year ago to 5.0% at fourth quarter 2018. Southern New Jersey was the only geographic area where submarkets experienced an increase in vacancy.

  • Stabilized vacancy in Southern New Jersey rose 70 basis points from 4.7% last year at this time to 5.4%.
  • Suburban Pennsylvania stabilized vacancy decreased by 70 basis points from December 2017 to 5.0%.
  • Stabilized vacancy decreased by 30 basis points in the City of Philadelphia from 5.2% one year ago to 4.9%.


Rent increases over the year varied across the metro area. Here are the effective rent changes by sub-area for 2018:

Southern New Jersey up 3.1%

Suburban Pennsylvania up 2.9%

City of Philadelphia up 1.9%

Metro-wide, effective rents rose 2.5% in 2018. Average metro-wide effective rents at fourth quarter 2018 are $1,885, or $2.03 per SF. Effective rents average $2,223 ($2.57 per SF) for high-rise product in the City of Philadelphia and $1,691 ($1.70 per SF) for low-rise product in the suburbs.

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