Friday, May 8, 2015

Philadelphia Office Vacancy Increases to 10.8%

The Philadelphia Office market ended the first quarter 2015 with a vacancy rate of 10.8%.

The vacancy rate was up over the previous quarter, with net absorption totaling negative 386,143 square feet in the first quarter. That compares to positive 378,460 square feet in the fourth quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,306,325 square feet.

Tenants moving into large blocks of space in 2015 include: Incyte Corporation moving into 191,056 square feet at 1801 Augustine Cut Off; National Penn Insurance Services moving into 126,369 square feet at 645 W Hamilton St.

CoStar subscribers can access the recording and PDF for the State of the U.S. Office Market - Q1 2015 Review & Forecast. The webcast aired on Tuesday, April 21. Log on and register by clicking the Knowledge Center tab.

Rental rates ended the first quarter at $21.89, an increase over the previous quarter.

A total of seven buildings delivered to the market in the quarter totaling 145,650 square feet, with 2,602,750 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 15.4 million square feet in the first quarter. Average rental rates increased to $22.74, and 244 office buildings delivered this quarter totaling more than 16.5 million square feet.

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