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Market Report

Philadelphia Office Market Report

4Q 2023

Biotech Sector Shines as Broader Philadelphia
Region Contends with Rising Vacancy

Positive notes appear amid challenges to urban office. According to data collected by the Center City District, while office visitations in the West Market Street area reached a post-pandemic high in July, volumes were 43 percent short of the level recorded four years prior. This indicates that office utilization remains challenged in core areas, as hybrid work schedules have proven stickier than first imagined. As such, some tenants are adjusting space needs, with the average lease shrinking 20 percent in size over just four years. On a brighter note, the life sciences sector has been a significant boon to Philadelphia proper, heavily boosting the University City submarket. Net absorption approached 515,000 square feet during the span from April to June, representing over 5.3 percent of area inventory and the second-highest quarterly total on record.
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