Philadelphia Office Market Report
Prospective Tenants Pursue Suburban Leases;
Core Concessions May Attract New Entrants
Offices outside of core urban areas capture notable leases. Suburban zones have been recording positive net absorption since mid-2021. Tenants took more than 2 million square feet off the market in the third quarter, marking a three-month absorption record, and an additional 750,000 square feet during the next six months. Pep Boys and Nutrisystem highlight the recognizable brands that have secured amenity-rich spaces outside the core this year. Outlying urban submarkets are also recording substantial amounts of leasing activity. University City continues to draw life science firms that collaborate with the University of Pennsylvania and Drexel University, the former institution having dramatically influenced the mRNA technology used in COVID-19 vaccines. Here, four large lease executions have recently approached 110,000 square feet, equating to roughly an eighth of this year's projected metrowide net absorption.