Philadelphia industrial real estate market reports
Q3 2021: Stronger growth during the pandemic with absorption and rental rates reaching record levels
The Philadelphia market grew stronger during the pandemic with absorption and rental rates reaching record levels. There is some worry about the growth of inflation and increased supply chain challenges globally, and its effects on the industrial market.
The consumer price index rose 4.6 percent on all products since August 2020 in the Philadelphia-Camden-Wilmington MSA. One major concern is the sharp rise of energy costs which have risen 19.2 percent over the course of the year.
Total year-to-date cargo volume is up 29.1 percent at the Port of New York and New Jersey compared with the prior five-year average and 41.2 percent over the prior 10-year average.
Net absorption has been very strong through the third quarter, totaling approximately 35.0 million square feet, already surpassing the 20-year high set in 2018.
Approximately 68.7 percent of the square footage under construction are buildings greater than 500K square feet.
Base rents have increased by 18.0 percent since the start of the pandemic and have continued a steady upward trajectory since 2015.
Investors’ attraction to the Philadelphia industrial sector has led to low cap rates and higher valuations, which have increased by 27.0 percent since April 2020.
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