Philadelphia Office Market Report
Office Vacancies Slow Rate of Ascent as More Companies Move Into Popular Submarkets
Early signs of office leasing recovery manifesting. While return-to-office plans for many firms remain dependent on the health situation, leasing activity is beginning to pick up. Current demand trends point to about 2 million square feet of office space being returned to the market in 2021, less than half of the 4.5 million net square feet relinquished last year. Positive net absorption was reported in 20 of Philadelphia’s 38 submarkets in the second quarter as several healthcare and professional services companies moved into new floor plans. These include Penn Medicine in King of Prussia as well as AmerisourceBergen and Hamilton Lane in Conshohocken. Move-ins such as these, while planned years in advance, signal a long-term need for offices that will manifest in stronger leasing as health conditions stabilize.