This May, JLL launched our first-ever City Retail Report with the goal of analyzing the most promising retail destinations across the country. We are excited (though not surprised) to say that Philadelphia came out on top! Thanks to reasonable rents and several highly-anticipated developments coming down the pike, Market East was named the most affordable and desirable retail corridor in America.
With its anchor mall struggling and a surplus of vacant lots, this prime corridor was once a blighted area. Now, it is on the verge of becoming a shopping and dining destination on par with New York’s SoHo and Miami’s Design District. But emerging Market East wasn’t the only corridor to get its due: Philadelphia’s established Walnut Street also received praise for its ideally located, but surprisingly affordable, spaces.
A robust mix of shops ranging from Rag and Bone to Target and an upbeat bar and restaurant scene all add to the draw of Walnut Street, especially for millennials who make up 40% of Center City’s population. Market East, meanwhile, has succeeded in attracting coveted but previously suburban-focused retailers, including MOM’s Organic Market, Design Within Reach, and Iron Hill Brewery. These will be the first urban core locations for both MOM’s and Iron Hill. Additional amenities like a Wawa and City Fitness are also adding to the excitement for potential retailers, office renters, and residents.
As such, expect to see an increased demand for leasing in coming years; rent growth for Market East has already soared 25% in the past year, while Walnut Street saw an increase of 11%. However, with an annual prime asking rent of $50 and $150 per square foot respectively, Market East and Walnut Street are still some of the most affordable destinations nationwide.
With nearly one million square feet of new or renovated retail space delivering between 2017 and 2019, expect Market East to continue making headlines in the coming years.