Philadelphia office market reports

Q2 2024


Total availability drops for the second consecutive quarter

A combination of stronger than expected leasing activity and a large owner-user office sale led to the second quarter in a row of decreasing space availability across Greater Philadelphia. A hair above 1.27 MSF of office space was leased in Q2 24’ increasing by just 1% QoQ from 1.26 MSF in Q1 24’. In the Wilmington CBD, over 500K SF of vacant available space was acquired by life science firm Incyte following their acquisition of the  Bainbridge 1 & 3 offices, previously a component of MBNA headquarters.


CMBS Loan Maturities set to mature by end of 2024

Maturing debt continues to be a point of concern, not only for landlords but for the tenants in the market. Flight to quality has quickly become flight to debt free landlords. There is currently $259 million in CMBS loan across 2 MSF of office space set to mature by the end of 2024 across Greater Philadelphia. Exacerbated by an elevated interest rate environment and high vacancies across many landlords' portfolios, the Greater Philadelphia office leasing market remains in the tenant's favor.


Investment sales average price per square foot paid*

Office property values continue to face downward pressure, with the average sale psf paid down 35% from $155 psf in 2023, to an average of $101 psf. This quarter saw more properties being sold at steep discounts, like 1760 Market Street which was recently sold for $11.5 million, a 64% discount from its prior sale price of $31.5M million back in 2018. More properties selling at discounts has also attributed to weak total investment volume, which now sitting at $58.1M, down 79% from the same point in time last year.

*Excludes owner-user and entity sales

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