Philadelphia’s large block environment has shuffled, but with little change in total availability
The CBD large block landscape has seen a lot of movement in the past year
May 29, 2019
- The CBD large block landscape has seen a lot of movement in the past year as a wave of larger tenants committed to new leases, many of them relocations. Despite the ongoing churn and the emergence of some high-profile blocks in the wake of these lease announcements, the amount of available space in blocks over 50,000 s.f. has actually increased by less than 20,000 square feet overall. The more significant shift is in the location of these block options.
- The Trophy segment has fewer large blocks available today than a year ago despite a slight uptick in the amount of total available space within those blocks. Commerce Square has the most work to do as Reliance and Macquarie relocate into Class A buildings, while other Trophy towers including 1735 Market, Two Logan, and Two Liberty saw their large block options dwindle as tenants relocated or expanded (Wells Fargo, Will Towers, Industrious, etc).
- The qualitative changes behind this minimal aggregate change in availability are significant. Large contiguous blocks are concentrated in the oldest buildings more than in recent memory, notably along South Broad and in certain Independence Mall buildings such as The Curtis and The Public Ledger. In a market with limited large requirements, will there be appetite from government, non-profit, and other sectors to take down more dated spaces in big moves, or will these assets need to chip away at these blocks in a more piecemeal fashion?
Source: JLL Research