Philadelphia is enjoying a period of expansion marked by a historically low unemployment rate, expanding employment base and rising wages, according to a new report from Avison Young. This strong job market will help fuel the commercial real estate market into 2020.

“Avison Young’s 2020 Forecast has some good news for Philadelphia,” said David Fahey, Principal and Managing Director of Avison Young's Philadelphia office. “Relatively strong job growth should continue to drive the commercial real estate market, creating opportunities here for wise investors.”

Avison Young released its “2020 Commercial Real Estate Forecast Report” today. The annual report series provides perspective on how global events, trends and indicators impact commercial real estate in a variety of sectors, including capital markets, office, retail, industrial, multi-family and hospitality.

Among the findings of the report for Philadelphia:

• While the project pipeline has thinned in Philadelphia, ground breakings, project planning and new inquiries remain relatively steady going into 2020.
• Population continued its upward trend, marking 11 straight years of positive growth that doesn’t show signs of slowing down.
• Although employment growth continues throughout the market, it has continued at a more modest pace than in recent years. The gradual slowing of job gains is a concern as it coincides with rising fears over the aging economic cycle and potential for an economic downturn. However, the looming risk and uncertainty surrounding international trade tensions and election uncertainty are more threatening to the U.S. economy than to the Philadelphia property market.
• The recession-resistant healthcare sector is forecasted to continue to dominate growth in the local economy amid any concerns of a looming recession.
• All property sectors are expected to measure an increase in leasing volume throughout 2020.
• The industrial sector is projected to see a hike in rental rates in 2020, while it is expected that office and retail rate will remain flat. Renovation and conversion of industrial product is a trend that will persist throughout 2020.
• Although office employment growth is projected to remain positive in the new year, the rate of growth will not be enough to keep up with new construction deliveries, resulting in an increase in vacant space year-over-year.
• As unemployment remains below 4%, companies are increasing wages to compete for qualified candidates.
• Philadelphia has shifted over recent years to an information-technology-based economy, with the largest growth measured in financial activities, health education, and research centers.

“Going into 2020, Philadelphia is poised to measure continued growth across property sectors,” the report noted. “Industrial is expected to outperform retail and office. Headwinds such as corporate consolidations and an imbalance in the supply and demand equation are potential headwinds that may temper the rate of growth.

“Despite these headwinds, the forecast for 2020 remains positive and offer a positive climate for continues investor demand,” the Philadelphia report concluded.

To read the full report – and to access global, national and local forecasts from across the Avison Young network -- please visit: www.avisonyoung.com/2020-forecast.

Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its Principals. Founded in 1978, with legacies dating back more than 200 years, the company comprises approximately 5,000 real estate professionals in 120 offices in 20 countries. The firm’s experts provide value-added, client-centric investment sales, leasing, advisory, management and financing services to clients across the office, retail, industrial, multi-family and hospitality sectors Avison Young is a 2019 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for eight consecutive years.