Over the past 12 months, rent growth in the Philadelphia metro area has moderated, with growth at 1.4%. Meanwhile, stabilized vacancy has increased 120 basis points over the year to 4.3%. In the city of Philadelphia, absorption has slowed over the year as it has in other major cities in the Mid-Atlantic, but at a higher rate than Baltimore City and the District.
SECOND QUARTER 2023 HIGHLIGHTS
The metro area Class A stabilized vacancy increased 120 basis points from a year ago to 4.3% at second quarter 2023. Southern New Jersey reported the lowest stabilized vacancy at 1.4% and was the only sub-area where it decreased from a year ago.
- Suburban Pennsylvania stabilized vacancy increased by 70 basis points from June 2022 to 2.8%.
- Stabilized vacancy in Southern New Jersey decreased 10 basis points from 1.5% last year at this time to 1.4% at June 2023.
- Stabilized vacancy increased by 240 basis points in the City of Philadelphia to 7.6%.
Suburban Pennsylvania led in rent increases over the year. Here are the effective rent changes by sub-area as of June 2023:
- Suburban Pennsylvania up 2.6%
- Southern New Jersey up 1.7%
- City of Philadelphia down-0.6%
Metro-wide, effective rents increased 1.4% over the year ending June 2023. Average metro-wide effective rents at second quarter 2023 are $2,278, or $2.47 per SF. Effective rents average $2,424 ($2.91 per SF) for the City of Philadelphia (primarily in mid- and high-rise product) and $2,202 ($2.25 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.
