Philly Hits Sweet Spot in Office Space Demand
In recent weeks, we’ve been covering news of Philly’s flourishing housing boom and rising home values. Now, we might soon add office properties to that increase: Finance & Commerce reports the city has hit a sweet spot in office demand with sales doubling to $1.4 billion:
Real estate values approaching or surpassing peak levels in New York, Boston and Washington have buyers turning to Philadelphia for its higher yields, rising rents and falling vacancies. That’s bolstering office deals in the fifth-largest U.S. city at a time when Manhattan-like towers have opened with luxury condominiums and cable operator Comcast Corp. is developing a skyscraper that will be the area’s tallest.
The website adds that this boom in demand could be part of larger “Philadelphia renaissance” attributed to local university graduates “sticking around instead of leaving for jobs in other cities,” as Bob Walters, CBRE Group’s executive managing director, put it.
A recent study by City Observatory backs this idea with findings that show young college grads spur on economic and neighborhood revitalization.
As a result of all this, real estate investors’ growing interest has prompted landlords to cash out:
About $400 million of office buildings are for sale within a four-block radius in the Market Street West district of downtown that is being marketed by Jones Lang LaSalle, said Doug Rodio, a broker at the company.
Philadelphia office sales double on higher yields [Finance & Commerce]