Nearly $1 Billion in Philly Office Transactions in 2015 So Far
When it comes to Philadelphia’s office market, rents are up, availability is down and purchases have nearly hit $1 billion in the first two quarters of the year.
In fact, the Philadelphia office market has seen $945 million in transactions over the first two quarters of 2015, according to a new report from Savills Studley, a commercial real estate services firm.
“Companies are realizing that Philadelphia is a destination,” said Paul Garberson, research analyst with Savills Studley. “They are relocating their employees here, developing urban campuses and moving in. It’s starting to get very exciting.”
Check out these notable transactions:
When it comes to rents, the average price is $24.88 per square foot, approaching its pre-recession high of $25.37 in 2007. Despite the uptick (1.3 percent in the second quarter, 3.2 percent year-over-year), Philadelphia is near the bottom of the United States in terms of rental rate growth.
In Center City, 2.9 million square feet has been leased — an increase of 8.2 percent from last quarter. But that’s still a steep drop from the 25.5 percent increase during the same time period a year ago.
“Philadelphia has seen moderate growth, with scattered big leases from pharmaceuticals, technology and manufacturing companies along with a number of large development deals, many of which are dependent on extensive state and local initiatives,” the report said.
The hottest markets in Philly for Class A space are East Market (up 6.5 percent), Bala Cynwyd (up 3.2 percent) and Blue Bell/Plymouth Meeting (3.6 percent.) Meanwhile, Class B Buildings are getting facelifts in order to compete. Landlords, healthcare and medical service providers are spending big bucks upgrading and renovating class B buildings in order to compete and stay relevant.