Saturday, October 27, 2012

Philadelphia's Retail Vacancy Rises to 6.4%

The Philadelphia retail market experienced a slight decline in market conditions in the third quarter 2012. 

The vacancy rate went from 6.2% in the previous quarter to 6.4% in the current quarter. Net absorption was negative 1,123,195 square feet, and vacant sublease space increased by 34,932 square feet. In second quarter 2012, net absorption was positive 127,373 square feet. 

Tenants moving into large blocks of space in 2012 include: Wegmans moving into 140,000 square feet at The Village at Valley Forge - Phase I; Speed Raceway moving into 106,000 square feet at Village Mall; and Burlington Coat Factory moving into 70,500 square feet at Garden State Pavilion-Bldg 3. 

Quoted rental rates increased from second quarter 2012 levels, ending at $14.02 per square foot per year. 

A total of five retail buildings with 40,346 square feet of retail space were delivered to the market in the quarter, with 661,533 square feet still under construction at the end of the quarter. 

This trend is compared to the U.S. National Retail vacancy rate, which stayed at 6.9% from the previous quarter, with net absorption positive 9.22 million square feet in the third quarter. Average rental rates decreased to $14.49, and 410 retail buildings delivered in the quarter. 

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