Market Trend: Philadelphia Office Vacancy Down to 10.9%

The Philadelphia Office market ended the second quarter 2014 with a vacancy rate of 10.9%. 

The vacancy rate was down over the previous quarter, with net absorption totaling positive 876,918 square feet in the second quarter. That compares to negative 433,098 square feet in the first quarter 2014. Vacant sublease space decreased in the quarter, ending the quarter at 1,262,768 square feet. 

Tenants moving into large blocks of space in 2014 include: Incyte Corporation moving into 191,056 square feet at 1801 Augustine Cut Off; The Harrisburg University of Science & Technology moving into 149,820 square feet at Harrisburg University Academic Center; and Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet at 1818 Beneficial Bank Place. 

Rental rates ended the second quarter at $21.48, an increase over the previous quarter. 

A total of seven buildings delivered to the market in the quarter totaling 413,734 square feet, with 2,116,720 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 11.4% from the previous quarter, with net absorption positive 24.53 million square feet in the second quarter. Average rental rates increased to $22.22, and 217 buildings delivered to the market totaling almost 11.4 million square feet. 
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