Savills Studley Releases Philadelphia Q3 2016 Office Market Report

25 October 2016

Savills Studley, the leading global commercial real estate services company specializing in tenant representation, has released its 2016 Q3 Philadelphia edition of the Savills Studley Office Market Report.

The quarterly report is an in-depth compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment trends and investment and development trends specific to the Philadelphia region.

Savills Studley Senior Vice President and Branch Manager Greg Soffian said, While firms continue to face rising asking rents and construction costs they can still find multiple relocation options in most suburban office markets and in Center City. These options provide tenants competition and leverage in their negotiations.”

Highlights from the 2016 Q3 Philadelphia Office Market Report include:

  • Availability is at its lowest levels in Center City, Bala Cynwyd and Main Line/Conshohocken, with rates remaining below 15 percent in all of these submarkets
  • Deal volume across the region rebounded from an anemic second quarter, totaling 1.7 million square feet, but tenants have leased just 6.7 million square feet in the last four quarters, well below the long-term average of 8.5 million square feet
  • Rents are up, but so are concessions. Owners, who are pressed to hit their pro-forma rent, may refuse to budge on face rent, but most will still extend generous concessions to hit their asking rent
  • Only a few large blocks of space remain available. In West Market,12 blocks of class A space over 50,000 SF and seven blocks of space over 100,000 SF are available despite a 13.7 percent availability rate
  • Build out costs have jumped by nearly 10.0 percent in the last 12 to 24 months, adding to the expense of relocation. The rise in labor costs has been particularly acute

The 2016 Q3 Savills Studley Philadelphia Office Market Report can be found on Savills Studley’s website, as well as a national report and reports for each of its 29 major U.S. markets.

 
 

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