Philadelphia Industrial Report 23Q4
Vacancy continued to rise for the fourth consecutive quarter, driven by a surplus of new construction outpacing demand. New project completions reached a low point, with just under 1.6 million square feet finished in Q4— a significant drop from the previous quarter's 9.3 million square feet. Projects under construction also hit their lowest since the pandemic shutdown.
Leasing activity saw an uptick in Q4, especially with larger deals extending into 2024. Despite the influx of new supply, developers faced challenges as occupiers sought more favorable terms, leading some developers to consider dividing buildings to secure deals.
Key Takeaways
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The regional vacancy rate increased from 5.7% to 6.1% between Q3 and Q4
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Although still down year over year, quarterly absorption rebounded to 1.8 million square feet
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The weighted average asking rent rose by 2.0% for the quarter, with multiple submarkets flattening
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Investment volume more than doubled in Q4 boosted by two portfolio sales.
