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Market Report

Philadelphia Retail Market Report

3Q 2021

Renewed Hiring and Elevated Spending Foster Leasing, Accentuated by a Drop in Construction

Returning demand well above limited supply. Recovering employment along with renewed household formation has improved recent leasing activity. Over 820,000 square feet of retail space was absorbed in the first half of 2021, offsetting a little over half of the space vacated last year. Greater employment paired with tailwinds from federal stimulus have lifted retail sales to about 15 percent above the pre-pandemic level. Buoyed by greater consumer spending, many retailers are again looking for space, often targeting existing floor plans given limited new supply. Philadelphia’s retail inventory will expand by a minimal 0.2 percent this year. The favorable demand-supply alignment is set to lower vacancy and advance rents in the months ahead.
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