Philadelphia Industrial Market Report

Goods-importing tenants scale back, while domestic distribution holds firm. After vacancy declined in early 2025 across suburban Philadelphia counties of Bucks, Montgomery and Chester, preliminary second-quarter data shows large negative net absorption in these areas. Tariff-induced cost pressures have likely prompted consolidation among manufacturing- and import-reliant tenants, such as electronics and home goods suppliers, adding renewed vacancy risk as completions remain elevated. In contrast, distribution-oriented properties focused on food and third-party fulfillment have seen more stable demand. A 1.2 million-square-foot lease signed by a logistics firm in Burlington County in April should help ease vacancy pressures after local rates exceeded 10 percent in March. Delaware, Salem and New Castle counties have also recorded an uptick in distribution-related big-box demand this year, better positioning them to absorb upcoming supply additions.