Thursday, April 25, 2024
Wednesday, April 24, 2024
King of Prussia office occupancy hits new high, even as Center City buildings struggle to attract tenants
By Paul Schwedelson – Reporter, Philadelphia Business Journal
King of Prussia business leaders are cautiously optimistic as office occupancy in the growing suburban center continues to increase.
Occupancy in Upper Merion Township office buildings has hit 89.3%, its highest point since the King of Prussia District began tracking it in 2011, according to data from CoStar. That occupancy rate doesn’t include buildings smaller than 10,000 square feet or owner-occupied buildings but provides hope for the future of the suburban office market.
While King of Prussia District CEO Eric Goldstein is pleased with the results, he recognized 2025 and 2026 will be key years because there are more pre-pandemic office leases that have yet to expire.
So far, 85% of employees have returned to in-office work compared to pre-pandemic numbers, according to the King of Prussia District’s recently released annual report.
“Companies and their employees want to be in locations that are amenity-rich,” Goldstein said. “If you look around the suburbs, I really can’t think of any other municipality that is more rich with amenities than King of Prussia or Upper Merion Township. Dining, retail, hospitality, entertainment, recreation, there’s an abundance. … I would think that explains why this market is doing as well as it’s doing.”
King of Prussia is the largest suburban office submarket in the Philadelphia region and ranks as the third largest employment center behind Center City and University City.
Occupancy in the district has been mostly trending up since the third quarter of 2022 when the rate was 83.6%. While remote and hybrid work has taken hold in the past four years, it’s taken time for office leases to expire. Before 2020, the highest occupancy rate recorded by the King of Prussia District was 89% in the fourth quarter of 2018.
King of Prussia's office occupancy outpaces the national rate of 84.2% and Philadelphia metro rate of 85.5% when excluding owner-occupied buildings and buildings smaller than 10,000 square feet, according to CoStar.
The largest office leases recently signed in King of Prussia include UGI Corp.’s 100,820-square-foot lease at 500 N. Gulph Road and Eigen X’s 21,339-square-foot lease at 1030 Continental Drive.
Full story: https://tinyurl.com/yuvcpptt
