2018 Philadelphia office sales volumes reversed the 2017 story, with the Pennsylvania suburbs surging and the city slowing
February 11, 2019
- A review of 194 office building sales completed in the Philadelphia CBD and Pennsylvania suburbs over the past two years reveals that suburban sales volumes nearly doubled year-over-year, growing 86.2 percent to just under $1.2 billion. The same cannot be said within city limits. 2017 was a busy year with over $1 billion in trades, and 2018 did not quite manage to keep up: sales volumes declined 20.1 percent year-over-year in Philadelphia.
- The uptick in the suburbs is multifaceted: new institutional owners are increasingly interested in Conshohocken, where several signature buildings traded, and portfolios are shuffling in Malvern/Exton and elsewhere as Liberty Property Trust continues to exit the office space. Liberty anticipates disposing of $650M in office assets in 2019. In Philadelphia, the CBD’s skyline towers saw less activity, while non-core assets traded for future redevelopment plays, including Elwyn’s properties at 40th and Market and two low-rise buildings at 2300 Market.
- 2019 is starting off strong in and out of the city, with Four Falls near the finish line in Conshohocken and 1735 Market set to establish a new high watermark for Market West upon closing. The strong pricing on this Trophy sale may motivate Brandywine to adjust its own Trophy portfolio in order to free up capital to kick off Schuylkill Yards. It is also likely to continue the cycle of out-of-town investment groups giving more thorough consideration to Philadelphia assets.
Source: JLL Research