Friday, February 1, 2013

Philadelphia's Office Vacancy Rises to 11.6%

The Philadelphia Office market ended the fourth quarter 2012 with a vacancy rate of 11.6%. 

The vacancy rate was up over the previous quarter, with net absorption totaling negative 120,250 square feet in the fourth quarter. That compares to negative 1,040,010 square feet in the third quarter 2012. Vacant sublease space increased in the quarter, ending the quarter at 1,219,839 square feet. 

Tenants moving into large blocks of space in 2012 include: Young Conaway Stargatt & Taylor, LLP. moving into 218,335 square feet at The Courthouse; Marshall, Dennehey, Warner, Coleman & Goggin moving into 131,325 square feet at 2000 Market St; and Philadelphia Media Network Inc moving into 125,000 square feet at 801 Market St. 

Rental rates ended the fourth quarter at $20.92, a decrease over the previous quarter. 

A total of eight buildings delivered to the market in the quarter totaling 490,854 square feet, with 802,262 square feet still under construction at the end of the quarter. 

This trend is compared to the U.S. National Office vacancy rate, which decreased to 11.9% from the previous quarter, with net absorption positive 27.16 million square feet in the fourth quarter. Average rental rates increased to $21.63, and 234 office buildings delivered in the quarter.

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