Philadelphia office tenant requirements have contracted 30% year over year
Companies across the region have put requirements on hold, though Southern New Jersey stands out
Total active requirements (s.f.)
The impact of the COVID-19 pandemic has led to a slowdown in active office requirements across the entire region. Last year at this time, JLL tracked more than 5.7 million square feet of active requirements. Today, the regional total sits just under 4 million square feet, amounting for a 30% decrease in active office requirements year over year on a square footage basis. In most cases, companies have chosen to put their requirements on hold or delay significant real estate decisions by executing short term renewals of 12-24 months.
Through all of this, activity in South Jersey has grown slightly compared to last July. Of the 549k square feet of active requirements there, 187k square feet of that is attributed to ten tenant requirements for firms in the banking, finance, and insurance industries, with four of these firms expected to downsize relative to their current office footprint. Across the river in Philadelphia, biotech and life sciences firms are a bright spot amidst the slow down, making up over 40% of the active requirements that JLL is tracking in the CBD.
With nearly 10 million square feet of office leases set to expire by the end of 2022 in the PA suburbs and CBD, an uptick in active requirements is possible. Whether many of these groups may opt to postpone or pause for another year or more remains to be seen.