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News release

Philadelphia

Jones Lang LaSalle: Suburban Philadelphia Office Report now available


​Jones Lang LaSalle is pleased to pass along first-ever Suburban Philadelphia Office Report hot off the press.  This report details five major submarkets in the Pennsylvania suburbs: Conshohocken, King of Prussia/Wayne, Malvern/Exton, Plymouth Meeting/Blue Bell and Radnor.  These submarkets were chosen as the five most active and vibrant as measured in four categories:

  1. Market supply indicators
  2. Available supply indicators
  3. Demand indicators
  4. Pricing indicators

Suburban Philadelphia Office Report highlights include:

  • Out of the 14 Suburban Philadelphia submarkets tracked by Jones Lang LaSalle, these five submarkets accounted for 60.0 percent of the positive absorption over the last two years.
  • Once known as the “flight to quality” both tenants and landlords have transitioned their views to toward a “flight to efficiency” as green buildings now play a more prominent role in location decisions and transactions. For landlords the appeal of going green is simple: Energy Star-certified buildings on average command $1.35 per square foot more than their non-green competition; whereas LEED-certified buildings can command a $6.75 per square foot premium.
  • Throughout 2012, green building certifications grew 130.0 percent, as Energy Star and LEED-certified buildings now represent 20.0 percent of the suburban Class A inventory.
  • From the tenant perspective, when the market bottomed out in 2010, low rental rates and ample opportunities to upgrade space led tenants to focus on cutting real estate costs, while positioning themselves to use company sustainability platforms to recruit and retain a younger workforce. 
  • As the majority of the office buildings in Suburban Philadelphia reach 20 years or older, redevelopment/renovation projects will grow significantly in 2013, as well-capitalized landlords will chose value-add properties to target for redevelopment.
  • Upgrading bathrooms, elevators, landscaping and lobbies will put some well-capitalized landlords in position to serve a growing niche market of Class B tenants looking for Class A curb appeal without paying the Class A rental premiums.   
  • Conshohocken and Radnor will hold tight to their niche Trophy markets, as continued upward pressure on rents and steadily tightening vacancy over 2013 could ignite the need to redevelop specialty lab space or spur the construction of Seven Tower Bridge in Conshohocken.

For a hard copy of this report, please contact:

Geoff Wright
Senior Research Analyst
+1 610 263 5811
geoff.wright@am.jll.com