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News release

Philadelphia

Philadelphia’s Commercial Real Estate Market Stands Tall

Jones Lang LaSalle releases Philadelphia Skyline Review


PHILADELPHIA, Sept. 9, 2010 — Philadelphia’s downtown commercial real estate market has stabilized according to Jones Lang LaSalle’s bi-annual Skyline Review.  The report, which analyzes 52 downtown premier office buildings, says that market conditions to date this year remained relatively steady given recent national economic woes.  Current vacancy rates in the Central Business District are testament to this trend and remain strong at 11.1 percent while the national average prevails at 15.3 percent.

“Philadelphia’s skyline has outperformed many of the country’s CBDs for two primary reasons,” said Jones Lang LaSalle Philadelphia Research Manager, Jennifer Lamprecht.  “When the economy started to show signs of weakness, construction came to a halt therefore preventing an oversupply of space.  Secondly, Philadelphia’s office market has been salvaged by industries such as healthcare, higher education and bio pharma which have thrived during the downturn.”

“While the overall market is holding steady, there are some submarkets such as Market Street West that softened considerably owing to its heavy concentration of professional and business services firms.  In fact, of the 5.1 million square feet of vacant space in the market, 4.1 million resides in the Market Street West submarket,” concluded Lamprecht.

Outlook

Transaction activity is expected to pick up pace in the next six months, although renewals are likely to remain the preferred option for tenants seeking to manage their cash flow. Relocations will be another viable option for those looking to consolidate into more efficient and higher quality space. Smaller tenants who are now entering the market are expected to absorb much of the available sublease space in trophy buildings. In the meantime, the market anxiously awaits space decisions from some of the nation’s largest blue chip corporations.

“Many analysts are wondering which companies will be in the position to expand and absorb the excess space on the market, and when the real rental appreciation will commence,” said Ron Cariola, Managing Director of leasing at Jones Lang LaSalle. “As we wait and see, one thing is certain, the Philadelphia skyline has fared well during this economic chaos and has proven its strength as one of the country’s most resilient office markets.”

Jones Lang LaSalle has been a prominent player in Philadelphia’s real estate market since 1997. The firm’s local scope has continued to expand with recent new office additions in Harrisburg, King of Prussia and Cherry Hill, NJ. With 280 employees, the firm currently manages 4 million square feet of office space and leases more than 10 million square feet of prime office and industrial space throughout the metro Philadelphia area.
 
To access Jones Lang LaSalle’s full report, please click: Skyline Review.
 
About the Skyline Review

Jones Lang LaSalle’s Skyline Review analyzes 52 premier buildings greater than 100,000 square feet or towering more than 15 stories in Philadelphia’s Central Business District – the core markets that truly move the market.  Over two-thirds of the buildings analyzed are located in the city’s primary financial and business hub, Market Street West.  The remaining buildings are located in Market Street East and University City.
 
About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2009 global revenue of $2.5 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.6 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with approximately $38 billion of assets under management. For further information, visit our website, www.joneslanglasalle.com.