Five suburban Philadelphia submarkets now have Class A office asking rents above $30 p.s.f.
Three core suburban submarkets have held asking rents above $30 for at least five years.
May 22, 2019
- Three core suburban submarkets (Bala Cynwyd, Conshohocken, and Radnor) have held asking rents above $30 for at least five years. Two newcomers have recently joined the $30 rent club: King of Prussia and Plymouth Meeting. These markets experienced five-year rent growth of 7.5 percent and 4.2 percent respectively, outpacing average Class A suburban rent growth of 3.9 percent between 2014 and 2019. The recent announcement of Metroplex II will help accelerate this growth as its new construction premium will help redefine Class A in Plymouth Meeting.
- Of the four other submarkets with above average five-year growth, two seem poised to hit the $30 mark if the market continues to churn: Malvern/Exton and Delaware County, which saw 9.2 and 6.8 percent rent increases since 2014. Only two submarkets – Lower Bucks and West Chester – recorded a decrease in asking rents since 2014.
- Looking ahead, Conshohocken is likely to pull ahead of Radnor as high asking rates in proposed projects help fuel rapid growth—Radnor’s lack of new supply and rising vacancy have recently helped moderate rent growth. High occupancy in many markets will artificially suppress asking rates in some cases as asking rates are based on available spaces, while 1 million square feet of proposed office projects will pull rates up in other cases.
Source: JLL Research