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Although regional office sales lag behind 2016, assets are selling well above the 10-year average of $139 psf

  • ​After reaching a cyclical high in 2016, we’re seeing a slowdown in office sales transactions in the Philadelphia region. While year-to-date sales activity is up 58 percent regionally year-over-year ($905.6 million), the queue of properties up for sale suggests that 2017 transactions may not even eclipse 2015 totals. More than 15 buildings totaling 4.2 million square feet of space are in the sales pipeline across the region, and at this point in the year it’s unclear how many of these will have interested buyers.
  • The average sale price of office properties across the region is $19 per square foot above the 10-year average. But why aren’t assets achieving the same record high average prices that we recorded in 2016? Last year’s transactions included some of the best investments in the region: Saint Gobain’s new headquarters at 20 Moores Rd sold for $382 psf, Cira Square and 2.0 University Place both traded above $400 psf, and 300 Four Falls went for $330 psf.
  • So far this year we’ve seen more modest purchases. At the peak is Gladstone Commercial’s $257 psf acquisition of Three Tower Bridge. With ongoing renovations of older assets across the region, we anticipate average sale prices to remain on an upward trajectory. Just don’t expect another record sales year this late in the cycle.​

Source: JLL Research

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