Philadelphia Industrial Market Report

Leasing concentrates in outer suburbs. Demand rebounded in the final three months of last year after recording net space relinquishment during the second and third quarters of 2025, the first consecutive decline since 2009. If demand continues this year, it supports the potential for vacancy compression in 2026 as the supply pipeline materially contracts. Much of last year’s net demand growth was concentrated in Burlington and Cecil counties, both located along the metro’s outer edge near neighboring gateways such as Baltimore and New York. This suggests Philadelphia’s strategic East Coast location remains a key driver of tenant demand, despite nationwide economic uncertainty. By contrast, counties in and around the urban core — including Philadelphia, Delaware, Montgomery, and Camden — each recorded roughly half a million square feet of net space relinquishment in 2025. Philadelphia County, in particular, posted one of the highest vacancy rates in the metro as of March, and softness in this core submarket may persist as pre-2000 buildings experience consolidation-driven move-outs, while post-2000 assets continue to face elevated vacancy.