Philadelphia Office Market Report

Companies commit to smaller spaces. Leasing activity was still present at the onset of this year, but declined relative to previous first quarter norms. Two of the largest lease agreements signed in the first three months of the year were by UGI Corporation and AmeriHealth Caritas, both surpassing 100,000 square feet, although the latter organization will not move in until 2024. The majority of executed leases were below 30,000 square feet as firms re-evaluate space needs. Smaller company footprints may challenge vacancy near-term amid a high completion total. As of May, Philadelphia had several projects that surpassed 100,000 square feet underway slated for 2023, and less than 40 percent of this space was pre-leased.