Philadelphia Office Vacancy Rises to 11.2%

The Philadelphia Office market ended the first quarter 2014 with a vacancy rate of 11.2%. 

The vacancy rate was up over the previous quarter, with net absorption totaling negative 324,914 square feet in the first quarter. That compares to positive 1,217,600 square feet in the fourth quarter 2013. Vacant sublease space increased in the quarter, ending the quarter at 1,368,152 square feet. 

Tenants moving into large blocks of space in 2014 include: The Harrisburg University of Science & Technology moving into 149,820 square feet at 326 Market St; Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet at 1818 Beneficial Bank Place; and BioTelemetry, Inc. moving into 46,972 square feet at 1000 N Cedar Hollow Rd. 

Rental rates ended the first quarter at $21.26, an increase over the previous quarter. 

A total of five buildings delivered to the market in the quarter totaling 131,624 square feet, with 1,194,598 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 11.5% from the previous quarter, with net absorption positive 21.68 million square feet in the first quarter. Average rental rates increased to $22.17, and 321 buildings delivered to the market totaling more than 16.1 million square feet. 
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