Philadelphia Office Market Report

Tenant demand varies widely across the metro. The past four quarters posted the strongest net absorption since 2017, with demand more than doubling deliveries. Even so, conditions remain highly building-specific. Some Class A towers are more than 90 percent leased, while similar properties in the same districts sit below 60 percent occupied, and submarket vacancy ranges from less than 4 percent to above 20 percent. With most projects under construction heavily pre-leased, vacancy in existing buildings has a greater impact than new supply. Class A and Class C buildings have generally outperformed Class B properties, as tenants favor either premium space or lower-cost alternatives.