Monday, June 22, 2026
Friday, June 19, 2026
Thursday, June 18, 2026
Costco renews lease for southern New Jersey distribution space
By Sam Bixler CoStar Research
Costco Wholesale, the Washington-based membership warehouse retailer that ranks among the largest retail operators in the world, renewed its lease for 100,134 square feet of industrial space at LogistiCenter at Logan in Logan Township, New Jersey.
Dermody Properties owns the 365,760-square-foot distribution building at 2100 Center Square Road in Gloucester County. The building, which was built in 2008 and renovated in 2022, is located within LogistiCenter Logan, a 1,100-acre, master-planned business park containing over 5.5 million square feet of warehouse, distribution and manufacturing space and is located at Exit 10 of I-295 and Exit 2 of the New Jersey Turnpike.
Dermody, a privately owned logistics real estate firm based in Reno, Nevada, acquired the Logan Township site in 2005 and crafted the master-planned campus, which has since attracted users including Kimberly Clark Corp., Freightliner and Amazon, the latter of which signed a 1 million-square-foot lease at the park.
Costco Wholesale operates more than 870 warehouse stores worldwide. Costco has maintained a growing distribution footprint in New Jersey, where it also leases warehouse space in Newark.
Tuesday, June 16, 2026
GXO Logistics renews warehouse lease in central Pennsylvania
By Margaret Sutherland Costar
GXO Logistics, a global logistics firm that manages outsourced supply chains and provides warehousing and e-commerce fulfillment for major brands, renewed the lease for the 413,867-square-foot warehouse it occupies at 4406 Freight St., also known as Industrial Park Road in Camp Hill, Pennsylvania.
The 39-year-old industrial building is owned by HagerPacific Properties, a Newport Beach, California-based investor that specializes in acquiring and repositioning commercial real estate across the country.
Built in 1987, the facility sits within a well-established industrial corridor near Interstate 83 and the Pennsylvania Turnpike.
The Camp Hill facility is one of several distribution centers GXO operates across central Pennsylvania, with additional locations in Middletown, Mechanicsburg and Carlisle.
Monday, June 15, 2026
Thursday, June 11, 2026
Wednesday, June 10, 2026
Smaller lease deals drive Central Pennsylvania’s core industrial market
By Brenda Nguyen CoStar Analytics
Industrial space availability trends across South Central Pennsylvania— spanning Harrisburg, Lancaster, York, Reading, Lebanon and Gettysburg—reveal a growing disconnect between development patterns and tenant demand.
Developers continue to build big facilities geared for single users, but tenants are leasing small-bay facilities, creating uneven market conditions across building size segments.
Small-bay industrial properties, those measuring under 50,000 square feet, remain the most in-demand segment, with availability holding near 3.5% in 2026. Industrial buildings measuring between 50,000 and 100,000 square feet also show tight conditions, with availability at 4.5%. Limited new construction in these two size categories, combined with steady demand from local and regional users, continues to support lower vacancy rates.
Over the past three years, approximately 530 industrial leases were signed in this six-county region, with 88%, or about 470 leases, signed for spaces smaller than 100,000 square feet. This sustained demand has kept vacancy compressed in smaller formats, even as overall supply has expanded.
Availability rises sharply with building size. Mid-sized industrial properties, those between 100,000 and 249,999 square feet, have availability above 10%, while availability in buildings between 250,000 and 499,999 square feet has reached approximately 12.3%.
Buildings larger than 500,000 square feet now have the most availability, at roughly 13.7% in mid-2026, surpassing the 250,000 to 499,999 square foot segment in recent quarters.
Although large leases often dominate headlines, they account for a small share of actual demand. Over the same three-year period, only 13 leases, about 2.5% of total transactions, exceeded 500,000 square feet. These large-block leases tend to occur irregularly, creating sharp swings in vacancy when they are signed or when a building in this size quotient is delivered vacant.
York emerges as South-Central Pennsylvania’s fastest-growing industrial hub
Tuesday, June 9, 2026
Monday, June 8, 2026
Thursday, June 4, 2026
Vanguard deepens nationwide push to slash office space
By Katie Burke CoStar News
The Vanguard Group is cutting ties with one of its Philadelphia-area offices, the latest move by the global investment adviser to trim its corporate real estate portfolio.
The Malvern, Pennsylvania-based firm opted not to renew the lease on its nearly 88,000-square-foot space at 45 Liberty Blvd., one of several properties it occupies that comprise its headquarters. It is the latest in a string of cuts the company has made to consolidate its national office presence, echoing moves by other large tenants across the United States as they look to adjust to evolving post-pandemic needs.
“Vanguard continuously evaluates the effective use of workspace in our leased and owned properties,” a Vanguard representative said in a statement to CoStar News. “As part of this effort, we are exiting our leased space at 45 Liberty Blvd. to optimize our existing footprint.”
The firm's looming exit is expected to spike the 155,000-square-foot building's vacancy rate to about 65% after years of being fully occupied. Vanguard's current lease is set to expire later this month.
The investment adviser's Malvern headquarters has long been spread across several properties in the Philadelphia suburb. The bulk of Vanguard's 20,000-person global workforce is based in the region, and despite its planned Liberty Boulevard exit, it still occupies just shy of 1.4 million square feet of office space there.
Yet similar to a cohort of tenants elsewhere across the country, Vanguard's decision to cut ties with some of its Malvern space is ultimately a result of reevaluating spatial needs and eliminating anything that has since become extraneous.
Vanguard is also letting go of one of its leases in Scottsdale, Arizona, where it is one of the region's largest employers. The firm had fully occupied the 123,340-square-foot building at 8501 E. Raintree Drive for the past two decades. In a sign of the national office market's strengthening recovery, the space is already set to be backfilled by mobile network provider Consumer Cellular.
Back in Malvern, the owner of 45 Liberty Blvd., FLD Group, is in talks with a prospective tenant to fill about 65,000 square feet of Vanguard's looming vacancy, according to a CMBS loan report.
Monday, June 1, 2026
Thursday, May 28, 2026
Tuesday, May 26, 2026
Wednesday, May 20, 2026
DrinkPak begins construction on massive East Coast manufacturing facility in South Philadelphia
By Margaret Sutherland
After signing the region's largest industrial lease since 2020 and one of the biggest industrial lease deals ever recorded in the Philadelphia market, California-based canned beverage maker DrinkPak has started construction on its new East Coast manufacturing facility spanning 1.4 million square feet.
The build-to-suit facility for the largest canned beverage contract manufacturer in North America will anchor the Bellwether District, a 1,300-acre commercial redevelopment project on a former refinery site in southwest Philadelphia.
Chicago-based real estate developer HRP Group, formerly Hilco Redevelopment Partners, bought the site located along the Schuylkill River near Interstates 95 and 76 out of bankruptcy in 2020 and rebranded it as the Bellwether District, a large master-planned industrial campus positioned to attract logistics and advanced manufacturing users.
The waterfront site provides access to the Port of Philadelphia and I-95, providing shipping connections to DrinkPak's brand customers in the Northeast, Mid-Atlantic and upper Midwest regions. The company's clients include such popular beverages as White Claw, High Noon, Monster Energy and Celsius.
DrinkPak plans to invest at least $195 million in the new facility, with the opening planned in 2027. The Philadelphia plant will join its two other U.S. locations, both also 1.4 million-square-foot facilities, one in the beverage firm's home city of Santa Clarita, California, and another in Fort Worth, Texas.
The large-scale beverage production and packaging plant will feature modern manufacturing operations to can energy drinks, sodas, teas, juices, waters, protein beverages, seltzers, beer, wine and spirits in a wide range of can sizes and packaging formats. The new plant will hum with four high-speed filling lines, each capable of producing up to 3,000 cans per minute. The facility will also include an automated variety repacking line to produce multi-flavor cartons and trays at speeds up to 2,000 cans per minute.
Additional building features include a 15,000-square-foot 40°F cooler, a 22,000-square-foot office and 40’ clear height. The facility shell will pursue Leed® Silver certification.
Arco National Construction is partnering with its repeat client to construct the beverage manufacturing facility. Arco also built DrinkPak's 1.4-million-square-foot facility in Fort Worth, Texas.
Monday, May 18, 2026
Thursday, May 14, 2026
Wednesday, May 13, 2026
Prologis sells Tastykake's headquarters in Philadelphia
By Jonathan Lehrfeld CoStar News
The Philadelphia headquarters and central production plant of snack maker Tastykake has been offloaded in a deal that comes as the market's industrial real estate sector shows signs of improvement.
San Francisco-based Prologis sold the South Philly facility at 4300 S. 26th St., the real estate investment trust confirmed with CoStar News via email. Prologis did not comment further on the deal.
An affiliate of Salt Lake City-based Bridge Investment Group bought the nearly 346,000-square-foot complex last month for $87 million, according to a city property record and CoStar data. Bridge did not respond to email and phone requests for comment.
Plans for the main hub of Tastykake — known for its creme-filled cupcakes and other pastries — remain to be seen. Neither the baked good group nor its Georgia-based parent company, Flowers Foods, immediately responded to a request to comment from CoStar News.
The Tastykake transaction "reflected premium pricing for infill industrial assets with strong functional utility, strategic access to regional transportation networks, and long‑term relevance for distribution or manufacturing users," CoStar wrote in its latest Philadelphia industrial report.
The deal also underscores how Philadelphia's industrial market "has found its footing in early 2026 after a historically weak 2025, when demand fell to levels not seen in decades."
The cross-dock manufacturing and distribution facility was constructed in 2009 as a build-to-suit for Tastykake. The company had nearly 10 years remaining on its 26-year lease when JLL began marketing the property for sale in the fall.
Founded as Tasty Baking Co. in 1914, the company announced in 2010 it was selling its former bakery property, corporate offices and distribution center in Philadelphia for $6 million in connection with its relocation to its current address. It then merged with Flowers Foods in 2011.
Prologis acquired the building in 2020 through its merger with Liberty Property Trust.
Monday, May 11, 2026
Thursday, May 7, 2026
Tuesday, April 28, 2026
WSFS Financial Corp. renews Office Lease in Philadelphia
By Katie Burke CoStar News
The parent company of WSFS Bank signed a deal to keep its headquarters at a Philadelphia office tower in a welcome boost for the property since it had its valuation cut by more than 35% and was last year sent to receivership.
Wilmington, Delaware-based WSFS Financial Corp. earlier this month signed the long-term extension agreement for its 96,800-square-foot hub at 1818 Market St. where it is the tower's namesake and largest occupant.
The nearly 1 million-square-foot tower is one of many scattered across Philadelphia's urban core that have faced increasing financial distress over the past several years as a product of significant occupancy losses, a bleak leasing climate and declining valuations that have complicated refinancing efforts.
Landlord Shorenstein Properties acquired the Center City property more than a decade ago for $184.75 million, much of which was financed through a $174 million loan issued through Bank of America. The San Francisco-based real estate firm then pumped nearly $95 million into renovations, tenant improvements and leasing expenses, efforts that helped boost the tower's appraisal value beyond $282 million and helped Shorenstein secure a roughly $223 million refinancing package issued by Barclays Capital Real Estate in early 2021.
Fast forward a couple of years, however, and Shorenstein — similar to other landlords across the United States — faced a troublesome combination of fewer tenants and smaller spatial requirements that sent vacancy rates soaring to unprecedented highs.
The 1818 Market tower was more than 80% occupied in 2021, according to CMBS reports, a figure that fell in the following years before settling at less than 70% by March 2025. The refinancing loan was underwritten on the assumption that the property would generate about $16 million of annual net cash flow, but the declining occupancy rate meant the WSFS-anchored building only pulled in about $12.7 million in 2024.
By last summer, Shorenstein owed $239.5 million on the commercial mortgage-backed securities loan backed by the tower, according to Philadelphia court documents. The loan is still performing but remains held with a special servicer.
Center City presence
While financial turbulence has pushed some tenants across the U.S. to look for more stable alternatives, WSFS' decision to double down on its existing space points to companies' increasing willingness to commit to their physical real estate.
The WSFS Financial subsidiary, one of the nation's oldest banks, inherited the 1818 Market St. space in early 2019 as part of its acquisition of Beneficial Bancorp, the Philadelphia-based financial holding company for which the tower was previously named.
Yet WSFS has quickly settled in, growing its regional workforce to more than 250 employees and, in 2024, signing on for additional space on the ground floor to house a banking office and a publicly accessible lounge space to host meetings and events.
The bank's renewal "underscores our unwavering commitment to Philadelphia, a city that has been integral to our growth and success as an organization." WSFS CEO Rodger Levenson said in a statement, adding that Philadelphia is more than "just a key market for WSFS."
Monday, April 27, 2026
Sunday, April 26, 2026
Bimbo Bakery to Move HQ from Horsham, PA to Texas
By Candace Carlisle CoStar News
The U.S. subsidiary behind Mrs Baird’s and Sara Lee bread has decided to move its headquarters to Texas from Horsham, Pennsylvania.
Bimbo Bakeries USA has leased space within an office building in Irving, Texas, a city about 13 miles northwest of downtown Dallas. The move puts Bimbo USA closing to its parent company's Mexico City headquarters and is expected to strengthen collaboration and enable "faster, more integrated decision-making across operations," according to a statement.
Bimbo USA's parent company is Grupo Bimbo, the world's largest baking company with operations in 39 countries. Grupo Bimbo entered the U.S. market in 1998 when it bought Mrs Baird's Bakery, which was founded in Fort Worth, Texas, by Ninnie Baird in 1908.
“Texas was our first home and played a defining role in our early history," said Greg Koehrsen, president of Bimbo USA, in the statement. "We’ve built a strong presence here over the years, and this region remains central to who we are today."
The relocation of Bimbo USA's headquarters to Texas after 17 years of being based in the Philadelphia area "positions us to operate more efficiently as we continue to invest in our brands and our communities," Koehrsen added.
The company's other bakery brands include Arnold, Ball Park, Entenmann's, Little Bites, Oroweat, Thomas and Stroehmann. Bimbo USA has more than 20,000 workers in the United States as well as 50 manufacturing locations.
Bimbo USA's senior leadership team and other employees are already working at the new Dallas-area office, the company said, with recruiting underway to fill additional roles. According to CoStar data, the company moved into about 7,000 square feet in the building in December.
A spokesperson for the company confirmed to CoStar News that employees have relocated to Dallas over the "last few months" with the new office expected to be "completed in June." In all, the spokesperson said about 100 workers will be based at the Dallas headquarters.
Still, Bimbo USA said it remains committed to the greater Philadelphia area and will keep its sales center and regional operations in Conshohocken, Pennsylvania.
Dallas is "a significant market" for Bimbo USA with multiple bakeries, sales centers and distribution centers in North Texas, according to the statement.
State PA's office consolidation adds pressure on Local landlords
By Brenda Nguyen CoStar Analytics
While these cost savings are fiscally meaningful for the state, they translate into an additional hit on office demand, particularly in markets where government occupancy has historically provided stable, long‑term demand.
Philadelphia is absorbing this shift amid challenging office conditions. In April, office availability across Center City hovered near 18%, while suburban office vacancy had settled around 16%, reflecting several years of negative absorption as tenants worked to right-size their office footprints.
Against this backdrop, the phased exit of state agencies from leased space introduces incremental availability into a market already contending with excess supply, particularly among Class B and C assets that have historically relied on public‑sector tenancy.
While trophy and top‑tier Class A buildings have demonstrated relative resilience amid a continued flight‑to‑quality, office properties favored by government tenants face greater concession pressure and longer timelines to secure replacement tenants, if any at all.
The implications of SOUP are even more acute in Harrisburg, where the state government has long played a stabilizing role in office demand. Office vacancy in the region remains comparatively low—generally in the high‑single‑digit range—but this stability is partially tied to the state’s outsized occupancy of office space in the region.
Pennsylvania’s move toward denser layouts, shared workspaces and hoteling occupancy patterns mirrors broader private‑sector trends, reinforcing the reality that fewer square feet per employee will be required going forward.
For Philadelphia and Harrisburg office landlords alike, the state’s consolidation strategy adds more pressure to already bifurcated office markets as the Commonwealth of Pennsylvania steadily contracts its leased office space through 2033.
Ace American Insurance Co. renews large office lease on New Jersey waterfront
By Linda Moss CoStar News
An anchor tenant at a Hudson River waterfront office tower owned by Manulife US Real Estate Investment Trust has extended the lease for its 117,280 square feet of space.
Philadelphia-based Ace American Insurance Co. signed a 65-month lease extension for 10 Exchange Place in Jersey City, New Jersey, according to landlord Manulife, a Singapore-listed real estate investment trust.
The deal will move back Ace's lease expiration from December 2029 to May 2035, Manulife said Thursday. The tenant will retain its entire 117,280 square feet of space at the same rental rate, the REIT said. Ace has been a major tenant at the 740,354-square-foot office high-rise, known as Exchange, since Manulife acquired the property in 2017. It paid $315.1 million for the building, according to CoStar data.
Global insurer Ace contributed 5.4% of Manulife's total gross rental income as of Dec. 31 last year and is the landlord's fourth-largest tenant. E-commerce giant Amazon has also recently renewed its lease for office space at Exchange, according to Manulife.
“We remain focused on prioritizing high-quality tenants and executing accretive leasing strategies that strengthen portfolio fundamentals over the long term,” John Casasante, Manulife's CEO and chief investment officer, said in a statement.
The Hudson waterfront continues to attract major financial services and multinational tenants due to its proximity to Manhattan and lower rents. While the pace of leasing activity in the Hudson waterfront office market has moderated in the first quarter, asking rents have remained resilient year-on-year as total office inventory continues to hold steady
Tuesday, April 21, 2026
Fusion Gyms takes former H&M space at Shops at 69th Street
By Vivian Peregrino CoStar Research
Fusion Gyms, a popular, no-contract fitness chain with five locations across Philadelphia and Bucks County, has signed a lease to open a sixth location at 2 S. 69th St. in Upper Darby, Pennsylvania, where it will occupy just under 26,000 square feet across the ground, second, and third floors of The McClatchy Building.
The distinctive Art Deco structure is part of the Shops at 69th Street, an outdoor retail destination near the 69th Street transit hub owned by New York-based Ashkenazy Acquisition Corp. The shopping center spans multiple blocks and is home to a mix of national and local retailers. Fusion Gyms will be occupying space formerly occupied by fast-fashion clothing chain H&M.
Fusion Theaters, a related business owned by the same owner of Fusion Gyms, also leased space in the Shops at 69th Street for its debut location. The new movie theatre and arcade games concept leased a 41,000-square-foot space next to Five Below in the open-air shopping mall.
The new theater space will be located near the former Tower Theater concert venue, which remains available and slated for redevelopment.
Monday, April 20, 2026
Thursday, April 16, 2026
How AI is changing the office market
By Katie Burke CoStar News
While artificial intelligence could automate much of the workplace, leading to fewer workers and less office space, it's also prompting the creation of companies that are major users of real estate.
ChatGPT maker OpenAI, Anthropic, Nvidia, Databricks and other AI companies have collectively become the largest pursuers of space across the U.S. market, helping to lower record-high levels of office availability and leading a post-pandemic recovery. That is despite other major companies, such as tech giant Amazon, choosing to cut their expansive footprints.
Against this shifting landscape, no one knows whether AI will lead to a commercial real estate boom or bust — or both. Just as the technology is acting "as a catalyst for both growth and decline" in the job market, it can have differing effects on office property.
"AI brings augmentation of human capabilities to a new level, fostering significant productivity gains and creating new job functions. As the composition of office work changes, so too will space requirements, workplace design and tenant demand."
Seattle-based Amazon, for one, is allowing leases to expire, temporarily suspending, or "hibernating," activities at some offices, and subleasing or terminating deals for hubs that have become largely vacant, Senior Real Estate Manager Martha Schwarzkopf Doyle said at a Global Real Estate and Facilities team meeting earlier this year.
"As it relates to how AI companies are going to affect other companies in terms of their leasing, that's the million-dollar question."
But for now, office landlords are sharpening their focus on Class A offices — the nicest and newest properties with tenant perks you can't find online — as they say there will be winners and losers in the wake of this shift toward automation, just as there was during the pandemic.
AI industry's real estate growth
Among the country's largest cities, commercial leasing generated by AI and tech companies accounted for about 20% of the total volume last year, the most of any industry.
That has been especially pronounced in tech hubs such as the San Francisco Bay Area, where AI firms have accounted for half of the major leases signed since the start of 2026. The activity has boosted their collective footprint well beyond 5 million square feet of office space, a presence expected to surge to at least 15 million square feet over the next four years.
"In previous tech booms, most of the capital companies raised went to hiring and expanding their workforce, but the big difference this time around with the AI sector is that they're spending a large amount of funding on infrastructure. The AI industry is in the office five, six days a week, and many are already starting to open additional offices in cities like Seattle, Boston and London. It has so far led to a lot of economic growth."
While they may start with a small office between 3,000 square feet and 5,000 square feet, AI firms and startups have been quick to tack on additional space, often within a matter of months, said Mike McCarthy, a Transwestern broker who has worked on a number of deals with such tenants. Especially as companies close additional funding rounds and bulk up their workforces, those spatial requirements are accelerating to 20,000 square feet, 40,000 square feet or, in some recent cases, full-building deals.
There has been "a tremendous amount of new business formation and growth, much of which is coming on the back of what's happened with AI over the last few years," Kilory Realty CEO Angela Aman told analysts on the landlord's latest earnings call. "We have AI tenants we've signed deals with that are already talking about expansion and growth, and there are a lot of additional new companies in the market thinking about taking additional space."
The CEO went on to say the AI-fueled boost, while only one part of how the technology is changing real estate, is creating "an exciting dynamic" that extends far beyond the most concentrated tech hubs, as the demand has helped prop up the broader national office market.
Braced for impact
At the same time, companies outside of the AI industry are using the technology to streamline their workforces, making cuts that have office market stakeholders watching for any sign of a potential bust.
Layoffs among corporate giants such as Salesforce, Meta, Workday and Pinterest in recent months have cast a pall over the market, as companies have attributed the cuts to their growing use of AI and a broader push to automate more traditional office roles.
Payments company Block, for example, unveiled plans in February to slash its workforce by at least 40%, a move CEO Jack Dorsey attributed to technology that has improved to the point where it's possible to do more with far fewer people.
"Intelligence tools have changed what it means to build and run a company," Dorsey said in public remarks about the planned cuts. "A significantly smaller team using the tools we're building can do more and do it better."
Still, the link between AI-related efficiency gains, layoffs and potential office real estate cuts remains tenuous. Some have questioned whether AI is an excuse for some CEOs to make cuts when a business doesn't want to admit it isn't generating enough revenue to justify its current spending.
Yet some of the nation's largest landlords, including Kilroy, Cousins Properties, Vornado Realty Trust and BXP, have been watching for any sign that the link between AI and reduced workforces is beginning to solidify — and translate into smaller space requirements.
They've found that, at least for now, tenants appear willing to commit to space, just as long as it's at the highest end of the market.
Bifurcated future
A flight-to-quality shift that took off in the earlier years of the pandemic, when companies began turning to high-end space to help entice staff to give up remote work and return to the office, has become permanently embedded in the national leasing landscape. Demand for trophy and premium properties far outpaces the desire by firms for aging, older alternatives.
"What we've been articulating for a couple of years is that AI is going to create jobs and it's also going to disrupt jobs that are more back office and processing," BXP CEO Owen Thomas said at Citi's Miami Global Property CEO Conference last month. "Our portfolio is geared towards that first group of employees, and that's what we're seeing."
So far, preliminary data backs up the job-creation effect of AI. Across the country, AI-related job postings have outpaced those for traditional tech roles, a sign that the technology is becoming more integrated across a broadening range of services and industries, Avison Young's Thibault said.
Moreover, it's an early indicator of the types of positions that will be formed to accommodate the AI boom as more companies race to adopt the technology.
"At the end of the day we might see certain industries and jobs go away, but historically we've always seen those jobs get replaced by something that requires new skills," Thibault said. "Folks behind typewriters that used to fill entire floors in office buildings went away but then were replaced by folks behind computers. Don't see AI, especially looking back historically, replacing all of the workers we have in office buildings today."
Committed to space
In the wake of the pandemic, which sent office vacancy rates to record highs and valuations to near lows, some office investors pulled out of the property type to focus on more lucrative investments, such as multifamily or healthcare.
Others converted some outdated offices entirely. For the first time in years, the rate of office demolitions and conversions has overtaken new development, according to CBRE and CoStar research.
Now, AI holds the potential to further accelerate changes in the office market, creating sharper winners and losers.
Based on the leasing trajectory in BXP's own portfolio, Thomas said demand for premium office properties remains firmly on the upswing.
Average lease sizes have climbed as terms are extended, the executive said, the clearest indicator that the need for physical office space isn't at any immediate risk.
"If a company was worried about AI, why are they in 2025 signing 10-year leases with us?" Thomas said, adding that, with the deals BXP has signed so far this year, the average terms have been even longer. "These are major financial commitments, and they're signing long-term leases, so I don't think they're forecasting big impacts AI will have on their space demand."
The outcome for older, more commodity properties is expected to be far bleaker, however, with AI technology expected to eliminate the need for many back-office and support roles that typically occupy those types of buildings.
Yet the pandemic had already determined the fate of those properties, and the increased adoption of AI is simply expected to deliver one of the final blows.
That means BXP is honing its focus on "upping the portfolio quality even further and getting even bigger in the gateway markets where we operate," Thomas said. "So yes, AI will absolutely have an impact, but that's why our strategy is taking an even narrower path."
Wednesday, April 15, 2026
Philadelphia’s medical office sector finding its footing after a rocky stretch
By Brenda Nguyen CoStar Analytics
Monday, April 13, 2026
Thursday, April 9, 2026
Monday, April 6, 2026
Latest population growth trends favor Pennsylvania’s suburbs and exurbs
By Brenda Nguyen, Veronica Miniello CoStar Analytics
The latest Census estimates reveal distinct regional population growth trends across Pennsylvania. Rural counties are lagging due to limited economic opportunities. In contrast, affordable areas near employment hubs, such as York and Cumberland counties, are attracting more residents, both from costlier urban markets and those from rural areas seeking better job prospects.
From July 2024 to July 2025, Pennsylvania added nearly 13,600 residents overall, yet a large number of residents, about 3,000, left the state. However, even amid domestic out-migration at the state level, select areas show strong residential demand.
Across the Keystone State, 41 counties posted population gains while 26 counties recorded losses, according to recent Census data. This split highlights steady population gains in the suburbs, as many residents relocate from urban cores to nearby, more affordable suburban and exurban areas close to employment hubs.
York and Cumberland counties added over 4,600 new residents
York and Cumberland counties in south-central Pennsylvania led the state’s domestic immigration, adding 2,525 and 2,124 residents, respectively. These areas benefit from accessibility to major employment hubs in Harrisburg, Philadelphia and Baltimore, as well as offering established neighborhood amenities and lower housing costs than urban cores.
York County's median home sale price stands at $299,990, well below the Philadelphia metropolitan area's $373,990—according to Homes.com.
Urban core areas lose favor with existing residents
Meanwhile, the largest domestic population losses in the state are concentrated in the major urban areas of Philadelphia and Pittsburgh.
In the City of Philadelphia alone, an estimated 9,726 residents departed for other areas, including its surrounding suburbs. Yet those losses were offset by strong international immigration and elevated birth rates, which resulted in an overall population gain of 1,546 residents. The city increasingly relies on these sources to sustain residential growth amid ongoing domestic out-migration.
In Allegheny County, the largest county in the Pittsburgh metropolitan area, out-migration eased to a five-year low as an estimated 2,785 residents relocated to other areas. Meanwhile, surrounding counties have gained residents from domestic migration, pushing the broader Pittsburgh market into net positive domestic migration for the first time in four years.
Rural counties in western Pennsylvania, including Erie, Cambria and Indiana counties, continue to experience domestic out-migration as the region’s job market struggles to fully recover from pandemic-era losses. A shrinking manufacturing base, an aging population, and a lack of employment opportunities have led residents in those countries to move to other areas.
Wednesday, April 1, 2026
Chubb Insurance lands deal for Philadelphia office building ahead of relocation plans
Tuesday, March 31, 2026
Monday, March 30, 2026
High Street Logistics Properties completes work on warehouse in Florence, New Jersey
By Ryan Cashion Costar
Construction has been completed at 900 Richards Run, marking the delivery of a 249,600-square-foot warehouse within the Richards Run corridor near Florence, New Jersey and the I-95/Route 130 interchange.
The fully-available building was developed by High Street Logistics Properties, a private equity real estate investment management firm founded in 2002 by former senior executives of Trammell Crow Co. and based in Oakbrook Terrace, Illinois.
According to CoStar's latest report on the Philadelphia industrial market, demand has returned this spring after a weak performance last year. Recent net absorption, the net change in occupancy, was a positive 2.3 million square feet, after falling into negative territory last year.
Burlington County in Southern New Jersey continues to lead as the region's strongest industrial submarket, accounting for 3 million square feet of positive absorption over the past year. The regional vacancy rate is expected to peak near 9.3% by mid-2026 before easing as new deliveries taper sharply and demand stabilizes.
Friday, March 27, 2026
Philadelphia’s medical office market hits a soft patch
By Brenda Nguyen CoStar Analytics
Thursday, March 26, 2026
Luxury apartments inject new life into struggling Center City commercial area
By Dion Haynes, Emily Damus
Like many urban commercial areas across the country, Center City in Philadelphia struggled in the COVID and hybrid work eras when large portions of its customer base worked from home. Office vacancies reached record highs as tenants relocated to smaller quarters to save money.
By converting a vacant 18-story office into luxury apartments, Alterra Property Group created a new customer base with hundreds of new residents for shops and restaurants in the area that largely had been governed by a 9-to-5 culture.
The development 17 Market West is Philadelphia’s largest post-pandemic office-to-residential conversion, transforming a 305,000-square-foot landmark from 1957 into a 299-unit luxury residential property.
The transformation was recognized as redevelopment of the year in Philadelphia as part of the 2026 CoStar Impact Awards, which were judged by real estate professionals familiar with the market.
The project "reflects the important role adaptive reuse can play in the future of cities, particularly in Center City Philadelphia and along the Market West corridor," Connor Burke, principal of Alterra Property Group, said in an email. "By thoughtfully transforming an empty office building into housing, we are bringing new residents, retailers, energy, and activity to the area while supporting the long-term vibrancy of the neighborhood."
Property management is provided by APG Living, an affiliate of Alterra Property Group. Preleasing strategy involved internet listing services, social media, video content and paid search advertising.
About the project: 17 Market West is a luxury apartment building in Center City Philadelphia with one- and two-bedroom units ranging from 553 square feet to 1,390 square feet. The building is connected to SEPTA's Suburban Station, a regional underground commuter rail line, and nearby office buildings.
What the judges said: "Beautiful adaptive reuse for an aging office building," said Gina Lavery, executive vice president of Econsult Solutions.
"The transformation of 1701 Market Street, a formerly struggling office building is now bringing a post 9-5 life to the CBD and Market Street corridor, as the site is transformed into a luxury apartment building," said Nadia Bilynsky, principal at MPN Realty.
New apartments turn aging parking structure into $1 million boost for Easton, Pennsylvania
By Dion Haynes, Emily Damus
The challenge for city officials in Easton, Pennsylvania, was to figure out what to do with an aging parking structure in downtown that was sitting on valuable land yet generating nothing in revenue.
They came up with the Marquis Apartments, a seven-story luxury residential building featuring 264 units, room for three ground-floor retail shops and 308 on-site parking spaces.
The project by City Center Group, a real estate investment and development firm, was recognized as multifamily development of the year in Philadelphia as part of the 2026 CoStar Impact Awards, which were judged by real estate professionals familiar with the market.
“The Marquis was an exciting project for both our team and the City of Easton. It transformed an obsolete parking garage that generated little to no tax revenue into a vibrant residential community that is already contributing to the vitality of downtown,” Zack Sienicki, chief operating officer at City Center Group, said in an email.
The project also sparked more apartment development in the neighborhood.
Construction of the project "supported more than 700 jobs and created a dozen permanent positions, while adding 258 much-needed apartments that leased in just five months, demonstrating the strong demand for quality housing in downtown Easton," Sienicki added. "Its success gave us the confidence to move forward with the Confluence just a few blocks away, which is now leasing for May move-ins.”
About the project: The Marquis is the largest apartment property in Easton’s history. Studio, one- and two-bedroom units range from about 500 square feet to 1,300 square feet. It is projected to generate more than $1 million in taxes and fees for the city, county and school district.
What the judges said: "I absolutely love the architecture and the way the project blends into the existing downtown fabric," said Eric Goldstein, president and chief executive officer of King of Prussia Business Improvement District. "The transformation of an under-performing asset into a project like this is a big win for the city of Easton and its residents/employees!"
New shopping center spurs retail boom in growing Delaware city
By Dion Haynes, Dominic Capocelli
In less than two years, Northside Shopping Center has become a retail magnet in Middletown, Delaware, drawing national brands and dining options to a growing area that had limited shopping options.
Demand for more retail was strong. Middletown's population grew from 6,600 in 2000 to 25,000 in 2023, according to the U.S. Census Bureau.
The shopping center opened in October 2024 with its first retailer — a 147,000-square-foot Target. Since then, the development has drawn anchors Sprouts Farmers Market, PetSmart, Hobby Lobby as well as a bank. More than a dozen restaurants and shops have opened or announced plans to do so within a two-mile stretch of the development.
The transformation was recognized as the commercial development of the year for Philadelphia, as part of the 2026 CoStar Impact Awards, which were judged by real estate professionals familiar with the market.
"We are very proud to bring more retail options — especially grocery options — along with jobs, and tax rateables to the already booming Middletown market," Lou Ramunno, president of Lenape Properties Management, said in an email.
About the project: The shopping center will have 230,000 square feet of retail space when fully built out. The shopping center serves a growing area with several new housing developments. Newer tenants include Honeygrow, Qdoba, First Watch, Paris Baguette, Citizens Bank and Tropical Smoothie Café.
The project means "growth and development" for the South New Castle County submarket."
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Exol Signs a 900,000+ SF Leasing in Bucks County, PA
By Paul Schwedelson – Reporter, Philadelphia Business Journal
Automated warehouse company Exol has signed a 973,200-square-foot lease to fully occupy a Bucks County building, one of the largest industrial leases in the Philadelphia region in recent years and the biggest so far in 2026.
Chicago-based Logistics Property Co. completed the South Penn Logistics Center at 2300 S. Pennsylvania Ave. in Morrisville last year. Logistics Property Co. announced the lease Wednesday and industry sources told the Business Journal the tenant is Exol.
The South Penn Logistics Center sits along the Delaware River across from Trenton. The site is also just north of the Keystone Trade Center, another major Bucks County industrial site.
Menlo Park, California-based Exol was founded in 2023 and was previously known as GreenBox. Exol specializes in automated fulfillment using artificial intelligence.
The South Penn Logistics Center will be the firm’s sixth location and first in the Philadelphia region.The Morrisville lease is the firm’s first since changing its name.
Exol's lease is the fourth largest industrial deal in the Philadelphia market since the start of 2024. Beverage manufacturer DrinkPak’s signed a 1.4 million-square-foot lease last year for a build-to-suit building at South Philadelphia’s Bellwether District. Also in 2025, Performance Team took 1.2 million square feet at the Box Park Logistics Center in Cinnaminson, New Jersey, a project developed by Logistics Property Co.
In 2024, third-party logistics company Cirro initially leased 518,000 square feet for half of a building at the Keystone Trade Center and later expanded into the full 1 million-square-foot building.
Those were the only three single-building industrial leases in the Philadelphia region larger than Exol’s since the start of 2024.
Full story: bit.ly/4aWfyQ7
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Nordstrom Rack expanding with new locations in Exton and Media PA
By Sam Bixler CoStar Research
Seattle-based fashion retailer Nordstrom, Inc. announced plans to open two of its off-price Nordstrom Rack stores in Eastern Pennsylvania. The new stores are scheduled to open this fall, ahead of the year-end holiday shopping season.
In Exton, Nordstrom Rack leased space in Main Street at Exton, a 652,776-square-foot open-air lifestyle center located off Route 100 in Chester County, owned and managed by Wolfson Group. The retail center includes Walmart, Lidl, Barnes & Noble, Michaels, Sephora, Athleta, Old Navy and Banana Republic.
Nordstrom Rack will also open a 30,000-square-foot store at Promenade at Granite Run, an 844,200-square-foot lifestyle center in Media owned and managed by BET Investments. Located off of Baltimore Pike and Middletown Road, the shopping center includes TJ Maxx, Michaels, Kohl's, Ikea and Boscov's.
Branded as the off-price retail division of Nordstrom, Nordstrom Rack offers customers up to 70% off apparel, accessories, beauty products, home decor and shoes from many of the top brands sold at Nordstrom stores, as well as core services like online order pickup for Nordstrom.com and NordstromRack.com.
The Seattle-based retailer operates two Nordstrom stores and seven Nordstrom Rack stores in Pennsylvania.
Philadelphia Legal Assistance occupies new office in Center City
By Lauren Diggs CoStar Research
Philadelphia Legal Assistance, a professional services firm that provides free civil legal services to Philadelphia residents who cannot afford an attorney, recently finalized a lease to relocate its office in Center City Philadelphia.
The firm secured 20,643 square feet on the second and third floors of the Cast Iron Building at 718–720 Arch Street. The deal makes PLA, which was scheduled to take occupancy on January 29, 2026, the largest tenant in the building, joining Vision For Equality, Local Initiatives Support Corp. and building owner AMC Delancey as tenants in the historic office building.
PLA is the second nonprofit to relocate its offices in downtown Philadelphia. Community Legal Services signed a deal late last year to relocate from its longtime home at 1424 Chestnut St. to SSH Real Estate's 123 S Broad St. in Center City Philadelphia.
Office Demolitions Spiked Across Philadelphia in 2025
Office demolitions across Philadelphia surged over the past year to their highest level in nearly a decade. Approximately 1.4 million square feet of office space was cleared from the market inventory as developers accelerated efforts to repurpose outdated and obsolete buildings.
This culling of underutilized buildings is taking place amid continued softness in the office sector. Office availability has long hovered in double digits since before the pandemic, a symptom of the overbuilding that took place in the 1980s. Today, the local office market has an overall availability rate of 14%, well above the availability levels for retail, industrial and multifamily.
The decision to demolish a building generally follows if it is not financially viable for conversion to residential or another use. Some owners are opting to demolish existing structures and rebuild from the ground up. Many of the cleared sites are being repurposed to more resilient, in-demand uses, including apartments, retail, education and healthcare.
The most significant office demolition of 2025 was BET Investments' demolition of the former Prudential campus at 2101 Welsh Road in Upper Dublin. The 861,000-square-foot teardown will make way for Promenade East, a 90-acre mixed-use development that will include 600 apartments, townhomes, senior housing, retail space, a hotel and medical office space.
Smaller-scale demolitions include a 41,312-square-foot office at 700 Turner Way in Aston—the future site of a ChristianaCare micro-hospital—and an 86,622-square-foot building at 1200 W. Swedesford Road in Berwyn, which will be replaced by Bear Hill Elementary School.
With many office building conversions remaining prohibitively expensive, demolitions of obsolete office space are expected to gain further momentum over the next decade. While they won't fully resolve the office sector's long-standing oversupply issue, they represent a meaningful step toward a rebalancing.
