As the summer months dwindle down, JLL has once again released our annual Skyline report: a comprehensive analysis of the buildings that shape our city skyline. What we found was a competitive skyline, with plenty of room to grow.
“Philadelphia’s skyline is in expansion mode,” VP, Director of Research Lauren Gilchrist told Curbed Philly. “Suburban tenants are dipping their toes in the city, CBD companies are growing, and established firms are looking to differentiate in new or renovated spaces. This is all good news for landlords, who should expect a busy next few years.”
And it is a landlords market. Relatively speaking, Philadelphia has very little of the country’s skyline in our market – only about 7%. While it is poised to expand with over 2 million square feet of space under construction, major players like the new Comcast building are already 100% leased. So until these new developments are open for business, Philadelphia’s skyline offices are hard to come by. The vacancy rate stands at 8.9%, well below the national average of 12.9%.
Despite this, the asking rent in the skyline averages about $31.18 per square foot. While that is a 5.4 percent increase from 2016, the rate is extremely competitive compared to other major U.S. cities for the same caliber of real estate. If you recall, our recent retail report found Market East is the most affordable and desirable retail corridor in the nation.
“Things are really good by Philadelphia standards, but if you take a moment and look outside of region itself, we do have a long way to go,” said Lauren. “There is opportunity here that we’ll continue to see as our economy and population expand.”