Friday, October 17, 2014

Philadelphia Area Office Vacancy Stays at 11.0% for 3rd Quarter

The Philadelphia Office market ended the third quarter 2014 with a vacancy rate of 11.0%.

The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 131,961 square feet in the third quarter. That compares to positive 760,857 square feet in the second quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,388,566 square feet.

Tenants moving into large blocks of space in 2014 include: The Vanguard Group moving into 204,000 square feet at Great Valley Corp Center; 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 third quarter at $21.62, an increase over the previous quarter.

A total of two buildings delivered to the market in the quarter totaling 219,036 square feet, with 3,506,297 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 11.2% from the previous quarter, with net absorption positive 27.56 million square feet in the third quarter. Average rental rates increased to $22.38, and 233 buildings delivered to the market totaling almost 13.2 million square feet.

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