Philadelphia Retail Investment Forecast
Retail Fundamentals Continue to Improve in the City of Brotherly Love, Diversifying the Metro's Buyer Pool
Excess savings bolster consumer buying power. Reduced spending on services during the onset of the pandemic, coupled with three rounds of government stimulus, bolstered local consumers' savings, stimulating a 21 percent jump in retail sales over the past year. Demand for available space elevated as a result, with vendors absorbing over 1.4 million square feet of space in 2021, contracting availability within 50 basis points of the metro's pre-recession rate. Fundamentals will continue to improve in 2022, albeit at a slower pace than last year. Many life science firms, including Century Therapeutics, The Wistar Institute, Spark Therapeutics and WuXi AppTec, have expansion plans underway that will create a plethora of high-paying jobs. This will support a rise in the median household income and provide a boost to consumer spending power, which in turn may elevate space demand across the metro. Although a rise in deliveries is projected for this year, net absorption is expected to outpace completions, promoting additional rent growth and vacancy compression throughout this year.