The quality of growing available space varies across the Philadelphia region
Pennsylvania submarkets have more Class A space to lease, while NJ and DE have more Class B availabilities
September 14, 2020
Available space by class
- As availability continues to creep up across the Philadelphia market, each cluster of submarkets within the region faces a different challenge when it comes to chipping away at the growing glut. The Pennsylvania suburbs have the most space available (11.8 million square feet or approximately 43 percent of all available space in the market), but more than half of this is in Class B properties, where occupancy is often lower. As the market shifts, this high availability may facilitate ongoing redevelopment of older office buildings into lab, distribution, and other uses experiencing high demand in the current climate.
- The CBD faces a different situation: more than 70 percent of its available space is in higher-quality buildings (Class A or Trophy). If demand remains suppressed, this will increase tenant leverage in the near-term if firms opt to enter the market to seek out relocation options.
- Southern New Jersey’s availability landscape is most heavily weighted to older and lower quality assets, whereas Delaware and the Lehigh Valley are more balanced, with availabilities split evenly between A & B buildings. Whether this affects the speed of recovery as the economy returns remains to be seen. In weaker markets, redevelopment into other uses is likely to accelerate in the coming years.