Philadelphia Office Market Report

Stability emerges despite bifurcated leasing trends. Following the strongest net absorption since before the pandemic, Philadelphia’s office market is set to tighten further in 2025. Sublease availability reaching its lowest share of total inventory since 2021 and historically subdued deliveries will aid this trend, as will the new full-time in-office mandate for Philadelphia’s federal workers, although that count could fall in the future. Peripheral hubs like the Wilmington CBD and areas near Villanova University, which posted the strongest Class A net absorption in over a decade last year, should sustain strong Class A leasing as firms prioritize high-quality spaces to attract employees. Several legal firms slated to move into the urban core will also bolster Class A performance. With metrowide vacancy of post-2010-built supply under 10 percent, however, some tenants may shift toward slightly older assets, as evidenced by Asplundh’s planned 100,000-square-foot move into a Class B 2000s-era building in Horsham. Lower-tier space demand should hold firm in Center City and nearby suburbs that saw elevated Class B/C net absorption last year, with tenants seeking larger, cost-effective footprints.