The King of Prussia commercial sector continues to move forward with the strength and resiliency that the region has come to expect from the largest commercial real estate market outside of Philadelphia, even in the midst of the COVID-19 pandemic.
The vacancy rate for Class A office space is 8.4%, more than a 2-point drop from this same time last year, while the average leasing rate increased by $1.28 to $33.26 PSF. Class B office space fluctuated more over the 12-month period but settled at 12.1%, still below the 12.7% at the end of Q2 2019. Vacancy rates for Class C office space experienced the greatest fluctuation over the 12-month period, jumping from 1.7% in 2019 to 6.3% at the end of the latest quarter. However, the inventory in Class C office spaces is still small compared to the other classes with only 364,000 SF over 14 properties. The average leasing rate increased over the same period by more than $8 to $25.76 PSF.
Industrial and flex space mirrors the assorted office sector. Vacancy rate for industrial property remains at a minuscule 0.3% with an average lease rate increase of $1.30 to $9.11 NNN from the same time last year. Flex properties spiked to 18.8% vacancy rate but the renewed interest in lab space will surely drive this number lower. The average lease rate for flex space still climbed to $29.45 NNN, an increase of $1.80 PSF from the end of Q2 2019.
While the long-term impact of the economic disruption is uncertain, King of Prussia’s business community was bolstered by the U.S. Small Business Administration’s Payroll Protection Plan since the beginning of the program in April. Over 227 loans were distributed to King of Prussia businesses to keep workers on the payroll or help cover overhead, including commercial lease payments. This accounts for the largest number of approved applications in the region outside of Philadelphia. The Commonwealth of Pennsylvania and Montgomery County also offer small business assistance and grants to eligible companies persevering during this unprecedented pandemic.
Eric T. Goldstein, Executive Director
King of Prussia District
King of Prussia District is a 501(c)(3) not-for-profit, special services organization. King of Prussia District engages public and private partners to collaboratively improve the economic environment in King of Prussia by making it more vibrant, attractive and prosperous. Learn more at visitKOP.com