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Small deals driving the regional leasing market: tenants 100,000 s.f.+ make up only 6.7 percent of active requirements

  • ​Anchor tenants, headquarters relocations, and rapid expansions may garner the big headlines, but Philadelphia’s regional leasing market runs primarily on a high volume of small- and mid-size deals. A current snapshot of tenants in the market across local submarket clusters reveals that at the outset of 2018, more than half of all active tenants are seeking 15,000 square feet or less. Another 15.4 percent need somewhere between 15,000  and 24,999 square feet.

  • Of all the submarket clusters, the PA suburbs has the highest share of larger occupiers relative to its market size. Its share of 25,000 – 50,000 s.f. tenants is by far the highest at 22.9 percent, and it is the only cluster with a double digit share of tenants seeking 100,000 s.f. or more (11.4 percent).

  • Kicking off new developments is challenging with only fourteen tenants looking for six figures of space. A lack of quality contiguous blocks in most major submarkets makes new construction more appealing, but with some tenants unable or unwilling to pay the premium, there are only a handful of known prospects for developers to court. That said, tenant requirements can change quickly, and not all searches are conducted publicly. Out-of-market arrivals, rapidly growing local players, and major mergers can all create new ‘white whales’ in the market. ​

Source: JLL Research, U.S. Census Bureau​

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