Monday, February 2, 2015

Philadelphia Retail Vacancy Increases to 5.9%

The Philadelphia retail market did not experience much change in market conditions in the fourth quarter 2014.

The vacancy rate went from 5.8% in the previous quarter to 5.9% in the current quarter. Net absorption was negative 74,123 square feet, and vacant sublease space increased by 21,583 square feet. In third quarter 2014, net absorption was positive 108,503 square feet.

Tenants moving into large blocks of space in 2014 include: Walmart moving into 100,000 square feet at 3400 Hartzdale Dr; ShopRite moving into 90,000 square feet at Wishing Well Plaza; and Giant Food moving into 66,472 square feet at Ephrata Marketplace.

Quoted rental rates increased from third quarter 2014 levels, ending at $14.02 per square foot per year.

A total of 6 retail buildings with 33,257 square feet of retail space were delivered to the market in the quarter, with 762,131 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 6.1% from the previous quarter, with net absorption positive 34.91 million square feet in the fourth quarter. Average rental rates increased to $14.90, and 561 retail buildings delivered, totaling almost 14.7 million square feet.

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