Over the past 12 months, rent growth in the Philadelphia metro area has moderated, with growth at 2.8%. Meanwhile, stabilized vacancy has increased 160 basis points over the year. In the city of Philadelphia, absorption has slowed over the year as it has in other major cities in the Mid-Atlantic, but not by as much as Baltimore City.
FIRST QUARTER 2023 HIGHLIGHTS
The metro area Class A stabilized vacancy increased 160 basis points from a year ago to 4.4% at first quarter 2023. Southern New Jersey reported the lowest stabilized vacancy at 1.8%.
- Suburban Pennsylvania stabilized vacancy increased by 140 basis points from March 2022 to 3.4%.
- Stabilized vacancy in Southern New Jersey increased 40 basis points from 1.4% last year at this time to 1.8% at March 2023.
- Stabilized vacancy increased by 240 basis points in the City of Philadelphia to 6.8%.
Suburban Pennsylvania led in rent increases over the year. Here are the effective rent changes by sub-area as of March 2023:
- Suburban Pennsylvania up 4.4%
- Southern New Jersey up 3.6%
- City of Philadelphia up 0.1%
Metro-wide, effective rents increased 2.8% over the year ending March 2023. Average metro-wide effective rents at first quarter 2023 are $2,220, or $2.41 per SF. Effective rents average $2,353 ($2.82 per SF) for the City of Philadelphia (primarily in mid- and high-rise product) and $2,151 ($2.20 per SF) for the suburbs (primarily in low- and mid-rise product).
Delta Associates, the research affiliate of Transwestern, is a firm of experienced professionals which has been providing consulting and subscription data services to the commercial real estate industry for over 40years.
