Philadelphia Office Vacancy Stays at 10.8%

The Philadelphia Office market ended the fourth quarter 2014 with a vacancy rate of 10.8%.

The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 408,343 square feet in the fourth quarter. That compares to positive 319,373 square feet in the third quarter 2014. Vacant sublease space decreased in the quarter, ending the quarter at 1,363,785 square feet.

Tenants moving into large blocks of space in 2014 include: L3 Communication Systems-East moving into 233,333 square feet at Camden Innovation Campus; The Vanguard Group moving into 204,000 square feet at Great Valley Corp Center and Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet at 1818 Market St.

Rental rates ended the fourth quarter at $21.80, an increase over the previous quarter.

A total of two buildings delivered to the market in the quarter totaling 343,850 square feet, with 2,966,000 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 10.9% from the previous quarter, with net absorption positive 37.53 million square feet in the fourth quarter. Average rental rates increased to $22.65, and 194 buildings delivered to the market totaling almost 15.9 million square feet.
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