Friday, January 30, 2026
Thursday, January 29, 2026
Tuesday, January 27, 2026
Investors are returning to office property sector
By Phil Mobley, Chad Littell CoStar Analytics
Workers were not the only ones coming back to offices last year.
Stable interest rates, improving supply-and-demand fundamentals and broader agreement on pricing underpinned a surge in building sales in the beleaguered sector. Office sales volume for 2025 was more than $56 billion, an increase of $10 billion from 2024, according to CoStar’s preliminary year-end figures. The year-over-year sales increase of more than 20% far exceeded that of the other major property sectors.
Several factors contributed to the rebound. For commercial real estate generally, a more favorable interest rate environment was perhaps paramount. The yield on the 10-year Treasury, a key benchmark rate for commercial real estate investment, began 2025 above 4.5%. By the fourth quarter, it had come down to around 4.1%, and has since remained reasonably close to that level.
While borrowing costs are still higher than typical in the last economic cycle, recent rate stability has given investors more confidence to move forward with loans and purchases. Thus, overall sales of commercial real estate rose more than $25 billion in 2025, with every major property sector clocking an increase.
Within the office sector, a tighter occupancy market also played a key role in attracting increased investment. The national vacancy rate peaked in the middle of 2025, and net absorption, or the change in net occupancy, turned positive for the first time in several years. In some strong markets, like New York and Dallas, the inflection point came even earlier. Meanwhile, a generationally small construction pipeline is likely to constrain future availability for some time to come.
Price stability was one result of these improved conditions. According to the CoStar Commercial Repeat Sales Value-weighted Index, commercial property pricing stayed essentially flat throughout 2025 after three years of precipitous declines. Capitalization rates also held steady at about 200 basis points above their level from late 2021.
While values are still approximately 45% below the cyclical peak, the stabilization suggests that buyer interest in investment-grade multitenanted office assets is returning. While the risks have not disappeared, the prospect of capitalizing on lower property values has brought even some institutional buyers back off the sidelines.
Monday, January 26, 2026
Philadelphia’s retail lease listings dominated by older properties
By Brenda Nguyen CoStar Analytics
The amount of available retail space across Philadelphia is hovering at a multi-decade low, following several years of resilient retail demand. At the end of 2025, Philadelphia had just 17.6 million square feet of available retail space, a 5.5 million-square-foot decrease from the previous space availability peak of 23.1 million square feet at the end of 2020.
Despite several notable national retail closures in the past year, the local retail property market remains on stable footing heading into the new year. The amount of available retail space has stayed relatively flat since 2024.
The constrained supply of Philadelphia retail space is most pronounced among newer properties. Of the 17.6 million square feet of retail space currently available, only 1.1 million square feet were built after 2009—less than 7% of the total retail availability.
Only nine spaces larger than 20,000 square feet are available in buildings constructed after 2010, severely limiting expansion options for big-box retailers, grocery stores and warehouse clubs looking to expand in the area. Most new, large-format options are available as proposed developments or pad site opportunities.
The scarcity of newer retail space options stems from Philadelphia's position as one of the nation's oldest retail markets. Most retail properties in the region were built before and during the mid-1990s. As such, retail properties constructed before 1980 account for 9.7 million square feet, or nearly 60%, of Philadelphia's total amount of available retail space.
Meanwhile, retailers' strong preference for newer space has created a bifurcated market. While competition for newer buildings is hyper-competitive, older properties continue to languish on the market, grappling with obsolescence.
This forces retailers with expansion plans to wait for tenant turnover to open up opportunities in existing modern centers, or pin their hopes on growing momentum for retail redevelopment and new development.
Looking ahead, at least 6.8 million square feet of additional retail space is in various proposal stages, suggesting that once borrowing costs moderate, construction prices stabilize, and rent growth firms, shopping center development could rebound. In the meantime, many expanding retailers are focused on backfilling second‑generation space left behind by bankrupt or rightsizing chains.
Friday, January 23, 2026
Villanova University acquires 8-acre site between Cabrini Campus and St. Davids Golf Club
By Ryan Mulligan – Reporter, Philadelphia Business Journal
Villanova University has acquired an 8.3-acre residential parcel adjacent to its soon-to-open Cabrini Campus as the school continues to expand its Main Line footprint.
The private university paid $2.25 million for the property at 1250 Upper Gulph Road, according to Chester County property records. The parcel sits at the border of Chester and Delaware counties between the Cabrini Campus in Radnor and St. Davids Golf Club in Wayne.
The seller was Janice Taylor Gordon, who had owned the residential property since 1969, property records show.
Representatives for Villanova did not respond to requests for comment.
Villanova acquired Cabrini University's former 112-acre campus after the school closed its doors in spring 2024. It plans to reopen the campus to its students in the fall.
An adjacent property at 1290 Upper Gulph Road was acquired by Villanova as part of its 2024 deal with Cabrini. The university paid $11.5 million for Cabrini's physical campus, in addition to $45 million to cover the defunct school's long-term debt.
The 1250 Upper Gulph Road property is near a turf athletic field and the campus's 100,000-square-foot Dixon Center and Thomas P. Nerney Pavilion, which houses a fitness center, indoor pool, basketball courts and locker rooms.
Villanova is investing some $75 million to renovate and repurpose buildings on the former Cabrini campus. Villanova President Rev. Peter M. Donahue has pointed to the athletic and recreational facilities as being less in need of renovation than other buildings on the campus.
Full story: https://www.bizjournals.com/philadelphia/news/2026/01/21/villanova-main-line-acquisition-cabrini-campus.html
Thursday, January 22, 2026
Friday, January 16, 2026
Tuesday, January 13, 2026
Monday, January 12, 2026
Beverage maker signs Philadelphia's largest industrial lease since pandemic
By Jonathan Lehrfeld CoStar News
A company that calls itself the biggest canned beverage contract manufacturer in North America plans to establish a flagship East Coast facility after signing the largest industrial lease in Philadelphia since 2020.
Santa Clarita, California-based DrinkPAK agreed to lease a 1.4 million-square-foot build-to-suit plant that would anchor a commercial redevelopment project underway in southwest Philadelphia known as the Bellwether District. The lease is the largest industrial deal signed in the market since 2020 and one of the biggest ever recorded in Philadelphia, according to a Newmark research analysis of CoStar data.
"This type of investment brings significant upside to Greater Philadelphia, fueling job creation, supply chain expansion and regional economic growth," said Nick Pickard, a broker on the Newmark team that represented DrinkPAK in the transaction.
The libations giant plans to invest at least $195 million into its new facility, with the company expected to move into the property in the first half of 2027.
The DrinkPAK development is part of a 1,300-acre campus currently underway at the former Philadelphia Energy Solutions refinery site that exploded in 2019. At full build-out, the campus is slated to contain more than 14 million square feet of new industrial and "innovation" space, according to HRP Group, the Chicago-based investment company behind the project.
The move could be a step toward reviving interest in warehouse space in the greater Philadelphia market. Industrial leasing in the city slipped in the past year, with demand in the third quarter of 2025 reaching its lowest level in more than a decade, according to CoStar's latest report. That followed trade policy announcements last year that increased uncertainty in the logistics and manufacturing sectors.
One of the last similarly-sized leases in the area was auto manufacturer Cardone Industries' renewal of a more than 1.3 million-square-foot facility in Northeast Philadelphia in 2021. That location is now being marketed for a new tenant, Bisnow reported.
As for the incoming beverage plant, it's expected to manufacture a range of beverages, including energy drinks, sodas, teas, juices, waters, protein beverages, seltzers, beer, wine and spirits, in various can sizes and packaging formats.
"DrinkPAK now features the three largest can manufacturing facilities in North America, with nearly 5 million square feet stretching from coast to coast," CEO Nate Patena said in a statement in December. Those other locations include 1.4 million-square-foot facilities in Santa Clarita and in Fort Worth, Texas.
Pennsylvania Gov. Josh Shapiro said the commonwealth is investing $2 million to support the project, and the company could also receive additional incentives from state programs, including a manufacturing tax credit.
Friday, January 9, 2026
Trophy to troubled: Former GSK building in Philadelphia trades at 60% discount
By Katie Burke CoStar News
A global pharmaceutical giant's former Philadelphia hub that once set a pricing record has sold for a major discount after the loss of its anchor tenant.
The Eastern Atlantic States Regional Council of Carpenters paid $52 million for the nearly 207,780-square-foot property at 5 Crescent Drive in the city's Navy Yard area, about 60% less than what it last sold for eight years ago.
The seller and special servicer, Rialto Management, was tasked with landing a buyer of the commercial mortgage-backed security loan that held the debt on the property. The deal closes a tumultuous period for the property after GSK's abrupt exit in the earlier years of the pandemic that reflected dropping demand for offices around the country — and makes the tower a symbol of the resulting lower values.
The British drugmaker prematurely terminated its lease for the entire building in 2022 as part of a broader plan to cut roughly 660,000 square feet from its national office footprint in response to pandemic-era changes that downshifted its spatial needs.
GSK's original deal for the building — which Liberty Property Trust developed for the biotech giant more than a decade ago — wasn't set to expire until September 2028. However, since the company bought out its lease and relocated to smaller space elsewhere in the city, the Navy Yard property has been sitting empty ever since.
The property has faced an increasingly challenging outlook in the years since Liberty sold the building to Korea Investment Management in May 2018. The $130.5 million price tag for the property set a record for Philadelphia's office market at the time of the deal, largely due to GSK's tenancy and supposedly long-term commitment to the space.
The overseas investment firm took out an $85 million loan through Goldman Sachs' mortgage arm to finance the deal, and the debt was subsequently securitized and sold to CMBS investors.
After making interest-only payments, Korea Investment Management defaulted on the property, and the loan was transferred to special servicing in November 2022, shortly after GSK's exit. The loan matured the following year, with Rialto Capital filing a foreclosure complaint against the Korean firm in early 2024.
A sheriff's sale later that year failed to garner a bid high enough to clear the seller's reserve amount, ultimately transferring ownership of the Navy Yard building to the CMBS trust. All the while, the property's value continued to deteriorate, falling from a 2018 appraisal of more than $132.5 million to less than $89.5 million by 2023, according to CBMS reports.
Filling the space
Korea Investment Management's purchase landed shortly before the pandemic sent the national office market into a yearslong freeze when tenants such as GSK offloaded record amounts of space, halted future real estate decisions and left landlords in perilous financial positions.
The combination of depressed demand, stagnant leasing and the ongoing effects of flexible work has helped push the national office vacancy rate to a record high of more than 14%, according to CoStar data. Tenants collectively handed back upward of 65 million square feet in 2024, boosting the total to more than 210 million square feet of move-outs since the start of 2020.
Those pandemic-induced factors have been exacerbated for a number of property owners, and some — especially if they're facing maturing loan deadlines or mounting expenses — have been eager to offload underperforming properties or ones that no longer fit with their investment strategies.
That has led to a wave of discounted deals across the United States, creating a window for buyers, such as the union, to take advantage of lower pricing for properties they otherwise wouldn't be able to afford.
The labor union is expected to move into the Crescent Drive building within the next three to six months, a spokesperson said, filling the space with about 125 employees and leasing out whatever is left over.
And it could have some better luck.
Tour activity among prospective Philadelphia office tenants has been steadily climbing over the past year, local landlord Brandywine Realty Trust recently reported. While companies in the area over the past year have surrendered about 1.3 million square feet more than they've occupied, according to CoStar data, the Philadelphia region as a whole has maintained a track record for having the third-lowest availability rate among the 15 largest U.S. office markets, trailing only New York City and Minneapolis.
Wednesday, January 7, 2026
US office leasing increases 5% in past year
By Phil Mobley CoStar Analytics
Office tenants signed up for an estimated 410 million square feet of space in 2025, a meaningful increase over the prior year. Still, persistently smaller deal sizes and a wide variation in leasing across major cities indicate a choppy recovery from the post-pandemic doldrums.
The result represents an increase of more than 5% from a lackluster 2024, in which office leasing volume fell to its lowest level in 15 years, excluding the pandemic year of 2020. Furthermore, leasing momentum gained traction throughout the year, as 2025 closed out with three consecutive quarters of leasing volume exceeding 100 million square feet, a first since the opening three quarters of 2022.
The trend toward smaller lease sizes is nearly universal across the country’s largest office markets. Otherwise, however, leasing performance varied widely across local markets. Boston saw the strongest year-over-year recovery, a 52% surge that brought annual leasing volume up to its pre-2020 average.
However, with several deals involving in-market cannibalization and others for yet-to-be-constructed space, the recent strong leasing has done little so far to stem the tide of rising vacancy in the face of Boston's nation-leading supply growth.
New York remained a leader in the national recovery, with office leasing volume rising over 20% from 2024 and reaching 10% above its average from the late 2010s.
Elsewhere, however, results were checkered. Chicago, Dallas-Fort Worth, Los Angeles and Washington, D.C., saw modest year-over-year increases in office leasing, but nevertheless remained below their customary levels. Meanwhile, leasing activity declined somewhat in Atlanta, Houston, Philadelphia, and Seattle from 2024.
Going forward, it may be difficult for the national office market to produce further growth in annual leasing activity for some time. Although demand has begun to recover, the rapid contraction in supply growth is a powerful constraint on tenants.
The lack of appealing options in new buildings appears set to choke off major office relocations, leaving many large tenants to bide their time in place, perhaps executing short-term renewals or committing to small expansions where possible.
The likely result could be more of the same: Smaller deal sizes and suppressed overall leasing volume.
OmniMax International renews three leases ahead of $1.3 billion company sale
By Andy Peters CoStar News
OmniMax International, a maker of roofing products, renewed leases totaling about 500,000 square feet of industrial space in the Atlanta, Philadelphia and Sacramento markets as it prepares to be acquired by a larger building materials company.
OmniMax's leases are for space at three industrial buildings, according to a news release and public records. The Peachtree Corners, Georgia-based company retained the same amount of space in all three properties. Financial terms weren’t disclosed.
Gibraltar Industries agreed to acquire OmniMax in November for $1.34 billion in cash. The deal is expected to close by June. Gibraltar obtained $1.3 billion in loans from Bank of America, Wells Fargo and KeyBanc Capital Markets to finance the acquisition.
The OmniMax industrial lease renewals were completed for the following locations:
231,000 square feet at 4455 River Green Parkway in Duluth, Georgia.
108,000 square feet at 1835 Diesel Drive in Sacramento, California.
105,000 square feet at 900 Jacksonville Road in Ivyland, Pennsylvania.
The California building owner is Libitzky Property, and the owner of the Pennsylvania property is Evergreen Resource Management, according to CoStar data. The owner of the Georgia property has not been identified.
OmniMax makes roofing accessories and gutters for residential structures. It designs and manufactures products under several brand names, including Amerimax gutters, Berger roof-drainage systems and Hancock Enterprises roofing accessories.
Gibraltar, based in Buffalo, New York, manufactures and distributes a wide range of building materials, including foundation ventilation products, solar panel racks and canopies.
