Philadelphia leasing activity decreases nearly 65% YoY
Total leasing activity in the Philadelphia Market was below 1M square feet for the second consecutive quarter
October 12, 2020
Philadelphia leasing activity
- Across the 1,200 office properties JLL tracks in the Philadelphia market, leasing activity for Q3 2020 closed at 549,917 s.f. This represents a 63.3% decrease in total leasing activity compared to the same quarter last year.
- Leasing activity for both Q2 and Q3 have been sub-1M square feet. At the height of the 2007-2008 global financial crisis, leasing activity in the market never dipped below 1M square feet.
- From 2015-2019, 1.8% of total inventory was leased in a given quarter on average. In Q3 2020, Suburban Philadelphia and Delaware led the market with just 0.54% of total inventory transacting. Leasing activity as a percentage of inventory for Southern New Jersey, Philadelphia CBD, and Lehigh Valley were 0.40%, 0.18%, and 0.24% respectively.
- Existing tenant demand in the market will not alleviate this trend in Q4 2020. Most tenants are waiting until more lockdown measures are lifted and a vaccine is approved, which moves timing back into the latter half of 2021.
- JLL’s data on current tenant requirements reveal that 1.9 million square feet of activity is on hold due to COVID-19. Nevertheless, JLL is tracking 114 active requirements totaling 4.5 million square feet.
- All I-95 corridor markets experienced significant YoY reductions in leasing activity. Based on properties JLL currently tracks, leasing activity fell by 52.9% in Baltimore, 68.2% in Boston, 53.1% in New York, 63.3% in Philadelphia, and 51.5% in Washington, DC.