With a new year and a changing skyline, JLL has released Q4 2016 stats that are indicative of some interesting trends in the central business district and suburbs of Philadelphia.
CBD insights show that:
- Businesses’ “reverse migrations” eastward, such as Five Below’s relocation to 701 Market Street, speak to Market East’s increasing appeal.
- Despite a strong Q4 uptick in CBD leasing activity, transaction levels couldn’t measure up to the previous five years.
- New deliveries are yielding mixed results: FMC Tower is 90% leased less than 6 months after delivery, while new development at 34 S. 11th St. is delivering with just three floors occupied, and the Navy Yard’s 1200 Intrepid has yet to lease its bottom three floors.
- Despite a few challenges, the outlook remains positive for 2017 and beyond. A wave of large tenants totaling more than 6.5 million square feet will soon engage the market in advance of their lease expirations.
In the suburbs, JLL found that:
- Nearly half of all new tenants are in the healthcare, life sciences, and technology sectors, which are collectively looking for more than one million square feet of office space.
- However, all of that demand is locally-generated — an indication that Philadelphia’s suburbs are growing but not necessarily attracting business from outside the region.
- Although it only comprises 20 percent of the Pennsylvania suburbs’ office inventory, the King of Prussia / Wayne submarket generated nearly half of the Pennsylvania suburbs’ total quarterly leasing activity in Q4.