Class A Apartment Market Philadelphia Metro Area: Second Quarter 2019

7/22/19

Strong rent growth persists throughout the metro

Across the metro area, only one submarket, Camden County, experienced a decrease in rents. Rent growth surpassed the long-term average in the City of Philadelphia and the metro area. Vacancy was up in Suburban Pennsylvania and Southern New Jersey while they remained unchanged in the City of Philadelphia. Montgomery County’s continued development activity in proximity to King of Prussia led it to experience the largest jump in stabilized vacancy from one year ago, up 370 basis points. Absorption in the City of Philadelphia remained nearly unchanged from one year ago at just over 1,700 units, with the lion’s share occurring in Center City. Supply remained fairly steady in the city from one year ago, increasing by 300 units.

SECOND QUARTER 2019 HIGHLIGHTS

The metro area Class A stabilized vacancy rate increased by 80 basis points from a year ago to 3.7% at second quarter 2019. Suburban geographic areas experienced an increase in vacancy.

  • Stabilized vacancy in Southern New Jersey rose 60 basis points over the year to 2.9%.
  • Suburban Pennsylvania stabilized vacancy increased by 160 basis points from June 2018 to 4.1%.
  • Stabilized vacancy remained unchanged in the City of Philadelphia at 3.6%.


Rent increases over the year varied across the metro area. Here are the effective rent changes by sub-area for the 12-month period ending June 2019:

  • Southern New Jersey up 2.3%
  • Suburban Pennsylvania up 3.1%
  • City of Philadelphia up 4.5%


Metro-wide, effective rents rose 3.5% in the 12-month period ending June 2019. Average metro-wide effective rents at second quarter 2019 are $1,959, or $2.12 per SF. Effective rents average $2,304 ($2.70 per SF) for high-rise product in the City of Philadelphia and $1,754 ($1.77 per SF) for low-rise product in the suburbs.

Delta Associates, the research affiliate of Transwestern, is a firm of experienced professionals which has been providing consulting and subscription data services to the commercial real estate industry for over 35years.

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