Philadelphia industrial real estate market reports

In the past twelve months total SF under construction across Philadelphia has decreased nearly 50% from its high of 55 msfin Q3 2022 to 27.5 msfin Q3 2023. With the current financing environment to build industrial buildings on speculation, it is likely that a developer may have negative leverage. This is a factor in ground breakings and construction starts being down approximately 50% from the same time last year.

Demand from tenants remains healthy. New supply is allowing tenants who were previously constrained in their choices, the ability to entertain building options that hadn’t previously existed.

Net absorption as a percent of total existing inventory in Q3 2023 hit +0.8%, continuing the streak of positive tenant demand across Philadelphia.

Until interest rates begin to decrease and stabilize, investment sales volume continues to face downward pressure.

With the U.S. 10-Year treasury note at 4.59%, difficulty amongst lenders and owners to secure debt has led many to hold on the sidelines for the moment.