Snapshots

Demand shortages plague some Philadelphia submarkets while supply shortages persist in others

Across a competitive set of Suburban Philadelphia properties, there are 22 large blocks of available space and 11 tenants seeking large blocks of >50,000 s.f.

November 27, 2019
  • Across a competitive set of Suburban Philadelphia properties, there are 22 large blocks of available space and 11 tenants seeking large blocks of >50,000 s.f. In sum, large block availabilities across the Philadelphia suburbs total 2.24 million square feet and the 11 tenants require 0.83M s.f. to 1.07M s.f., resulting in a tenant demand shortage of 1.17M s.f. to 1.41M s.f.
  • This demand shortage is heavily concentrated in the Horsham / Willow Grove submarket where big blocks amount to 800K square feet. With only one large requirement currently targeting the submarket, tenant favorability will continue unless new tenants become interested in this submarket. Conversely, the King of Prussia / Wayne submarket may have a supply scarcity problem. Four tenants are targeting two available large blocks. This problem is exacerbated by the fact that the two availabilities are 56,000 s.f. and 62,000 s.f., and two requirements targeting the submarket exceed 100,000 s.f. Along with Conshohocken, supply scarcity is likely to spur ongoing new construction. 
  • Looking forward, rents in submarkets with demand shortages should fall. Rents should hold steady where demand is meeting supply, and look for landlord favorable conditions where supply is limited in King of Prussia and Conshohocken unless additional build-to-suit or spec buildings are introduced into the pipeline.

Source: JLL Research

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