Philadelphia Office Market Report

Major financial firms filling luxury office space. The metro’s office market began the year with a vacancy rate 60 basis points below the national level — roughly 100 basis points under for Class A properties. Future Standard’s new lease in January and the opening of Chubb’s new building in the spring highlight Class A space demand. Ongoing reductions in corporate income taxes should continue to improve Philadelphia’s business climate, which could aid leasing in the long term. Pennsylvania will lower the rate by another 50 basis points to 7.50 percent this year, on a course to 5.0 percent in 2031. Meanwhile, the metro’s least vacant Class B/C submarkets, such as Market Street West and Northeast Philadelphia, are likely to maintain those dynamics. The former submarket’s central location and the Northeast neighborhood’s relative affordability and proximity to the CBD should support leasing this year. Overall, the metro’s Class B/C vacancy rate began 2026 in the low-12 percent band, well below the high-end level.