Saturday, February 9, 2013

Philadelphia's Retail Vacancy Rises to 6.4%

The Philadelphia retail market did not experience much change in market conditions in the fourth quarter 2012. 

The vacancy rate went from 6.3% in the previous quarter to 6.4% in the current quarter. Net absorption was negative 121,857 square feet, and vacant sublease space decreased by 40,143 square feet. In third quarter 2012, net absorption was negative 835,612 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 Speed Raceway moving into 78,000 square feet at Cinnaminson Shopping Center. 

Quoted rental rates decreased from third quarter 2012 levels, ending at $13.86 per square foot per year. 

A total of 10 retail buildings with 86,485 square feet of retail space were delivered to the market in the quarter, with 857,574 square feet still under construction at the end of the quarter. 

This trend is compared to the U.S. National Retail vacancy rate, which decreased to 6.8% from the previous quarter, with net absorption positive 26.998 million square feet in the fourth quarter. Average rental rates decreased to $14.43, and 804 retail buildings delivered in the quarter.

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