Philadelphia Retail Market Report

Backfilling characterizes leasing gains. Rising employment opportunities and notable household formation will reinforce consumer spending across the metro this year. Office absorption returned to pre-pandemic levels in 2024, and record multifamily deliveries attracted new residents. Although store closures increased last year and may rise further in 2025, strong demographic trends drove leasing activity to post-pandemic highs in 2024 and should sustain rapid backfilling. Grocery stores, discount retailers and fitness centers lead this year’s move-ins, concentrated in higher-income suburbs like Bucks and Burlington counties. Even if vacancy ticks up in less affluent areas like Camden County, experiential concepts are revitalizing harder-to-fill spaces across the market. Center City will see a wave of activity-based tenants, while an Italian marketplace and cooking school takes space at the King of Prussia Mall, alongside luxury and specialty retailers leasing smaller spaces in anticipation of renewed foot traffic.