Monday, April 28, 2014

Market Trend: Philadelphia Retail Vacancy Down to 6.0%

The Philadelphia retail market experienced a slight improvement in market conditions in the first quarter 2014. 

The vacancy rate went from 6.2% in the previous quarter to 6.0% in the current quarter. Net absorption was positive 1,175,336 square feet, and vacant sublease space decreased by 8,554 square feet. In fourth quarter 2013, net absorption was positive 629,439 square feet. 

Tenants moving into large blocks of space in 2014 include: ShopRite moving into 90,000 square feet at Wishing Well Plaza; LA Fitness moving into 52,248 square feet at Collegetown Shopping Center; and Lehigh Hospital moving into 50,041 square feet at 1309 Blue Valley Dr. 

Quoted rental rates increased from fourth quarter 2013 levels, ending at $13.90 per square foot per year. 

A total of 9 retail buildings with 140,422 square feet of retail space were delivered to the market in the quarter, with 209,580 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 6.5% from the previous quarter, with net absorption positive 24.41 million square feet in the first quarter. Average rental rates increased to $14.63, and 779 buildings delivered to the market totaling almost 12.5 million square feet.

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