The Philadelphia Office market bucked the trend of national vacancy rates with the first quarter 2015 increasing to 10.8%.
The vacancy rate increased over the previous quarter, with net absorption totaling negative 386,143 square feet in the first quarter. This in comparison to positive 378,460 square feet in the fourth quarter 2014. Moreover, vacant sublease space increased in the quarter, ending the quarter at 1,306,325 square feet.
A number of large tenants moved in to large blocks of space in 2015 thus far including Incyte Corporation moving into 191,056 square feet at 1801 Augustine Cut Off; National Penn Insurance Services moving into 126,369 square feet at 645 W Hamilton St.
While vacancy increases slightly rental rates ended the first quarter at $21.89, an increase over the previous quarter.
A total of seven buildings delivered to the market in the quarter totaling 145,650 square feet, with 2,602,750 square feet still under construction at the end of the quarter.
The regional trend was different to the U.S. National Office vacancy rate, which decreased to 10.9% from the previous quarter, with net absorption positive 15.4 million square feet in the first quarter. Average rental rates increased to $22.74, and 244 office buildings delivered this quarter totaling more than 16.5 million square feet
(Data from CoStar Group)