Philadelphia Office Market
| Average Asking Rent (Price/SF) | $30.36 |
| Vacancy Rate (%) | 15.1% |
| Net Absorption (SF) | -685,514 |
As the saying goes, “it’s always darkest before dawn.” In the final quarter of 2020, office occupiers across the Philadelphia market shed a net total of 685,514 square feet of space, the largest quarterly loss since 2009. Philadelphia’s Central Business District (CBD) accounted for the bulk of these losses at approximately 550,000 square feet, compared to 136,000 square feet for the suburban market.
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Philadelphia Industrial Market
| Average Asking Rent (Price/SF) | $6.98 |
| Vacancy Rate (%) | 5.0% |
| Net Absorption (SF) | 2,710,713 |
Occupiers, investors, developers and landlords across Greater Philadelphia benefitted from a strong industrial market in the third quarter. Average asking rents modestly appreciated, the development pipeline expanded and vacancy decreased on the heels of the largest quarterly net absorption since the first quarter of 2015. 2.7 million square feet of positive net absorption accumulated during the past three months, driven by large occupancies in each of the three markets comprising the Greater Philadelphia region, predominately in newly delivered or renovated space. In New Castle County, Delaware, DART Container occupied its newly constructed 1.0-million-square-foot warehouse, having relocated and consolidated operations from Maryland. In Southeastern Pennsylvania, major occupancies by DHL, Giant/Peapod and Amazon, among others, drove quarterly absorption over 700,000 square feet. Amazon was also active in Southern New Jersey this quarter, occupying the approximately 500,000-square-foot warehouse at 1250 Forest Parkway in Gloucester County, a vintage 1990s building formerly occupied by Nine West prior to that retailer’s bankruptcy. New construction also proved attractive to occupiers in Southern New Jersey; Astral Diagnostics occupied the 126,117-square-foot warehouse at 2070 Center Square Road in Gloucester County and multiple leases were inked for warehouses under construction.
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Southern New Jersey Office Market
| Average Asking Rent (Price/SF) | $20.88 |
| Vacancy Rate (%) | 16.8% |
| Net Absorption (SF) | -85,304 |
Approximately 85,000 square feet of negative absorption hit Southern New Jersey’s office market in the final quarter of 2020, reversing three quarters of occupancy gains made amid the pandemic. Despite fourth-quarter losses, the market closed this challenging year with 25,168 square feet in positive absorption, which made it and Delaware the only two markets in the Greater Philadelphia region to post net occupancy growth in 2020.
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| Average Asking Rent (Price/SF) | $25.48 |
| Vacancy Rate (%) | 18.7% |
| Net Absorption (SF) | -328,174 |
The Wilmington, Delaware office market has remained relatively quiet throughout the pandemic as many tenants paused transaction activity to reassess their commercial real estate needs. While other office markets in the greater Philadelphia region felt the strain of the pandemic more immediately and more acutely, in Wilmington there was no significant increase in the volume of sublease space, nor many announced major downsizings in the first three quarters of the year. Yet, there were signs in the fourth quarter to indicate some office tenants have made the decision to reduce their footprint. Negative net absorption tallied approximately 328,000 square feet in the fourth quarter, although the annual absorption figure was positive, due to strong gains in the first half of the year.
