South Broad vacancy could rise to 30 percent by the end of 2020 without significant lease up, creating new opportunities for large users
A survey of 11 buildings in the South Broad micromarket reveals vacancy has doubled in two years and is set to climb higher with the announced departures of Wells Fargo and the Philadelphia Mental Health Care Corporation.
- A survey of 11 buildings in the South Broad micromarket reveals vacancy has doubled in two years and is set to climb higher with the announced departures of Wells Fargo and the Philadelphia Mental Health Care Corporation. As of the third quarter of 2018, vacancy in this set of buildings was 17.4 percent, significantly higher than the CBD’s overall vacancy of 11 percent. Occupying 345,000 square feet today at 123 South Broad and One South Broad, for a total of 11 percent of the micromarket, Wells Fargo’s impending relocation to Two Logan will push South Broad’s vacancy to 30 percent without any backfilling.
- Wells Fargo’s two large blocks do offer needed options in an office market starved for contiguous spaces of 100,000 square feet or greater. Only three other such spaces are being marketed as available between the two rivers: Willis Towers Watson’s old space at Centre Square, Reliance Standard’s former space at Two Commerce, and PNC’s block at 1600 Market. As to whether corporate users will consider Broad Street over Market Street, Neumann Finance is one such example, taking a floor at 123 South Broad in its relocation from New Jersey. Spaces, opened a co-working office at the Hale Building, a half-block away from the corridor following a makeover.
- Whether South Broad landlords backfill these spaces in large moves or incrementally will depend on 1) the next round of decisions by larger tenants facing expirations, and 2) on whether the increasing appeal of Midtown Village drives greater leasing velocity.
Source: JLL Research, Costar