In 2023, rent growth in the Philadelphia metro area is below average, with an increase of 1.5%. Meanwhile, stabilized vacancy has remained unchanged since December 2022 at 4.7%. In the city of Philadelphia, absorption has significantly increased in 2023, similar to other major cities in the Mid-Atlantic, such as Baltimore City and the District.
FOURTH QUARTER 2023 HIGHLIGHTS
The metro area Class A stabilized vacancy is unchanged from a year ago at 4.7% at Q4 2023. Southern New Jersey reported the lowest stabilized vacancy rate at 2.6%.
- Suburban Pennsylvania stabilized vacancy increased by 50 basis points over the year to 4.3%.
- Stabilized vacancy in Southern New Jersey decreased20 basis points from 2.8% in Q4 2022 to 2.6% in Q4 2023.
- Stabilized vacancy decreased by 70 basis points in the City of Philadelphia to 6.0%.
The city of Philadelphia led in rent increases in 2023. Here are the effective rent changes by sub-area in 2023:
- City of Philadelphia up 1.9%
- Suburban Pennsylvania up 1.4%
- Southern New Jerseyup0.9%
Metro-wide, effective rents increased 1.5% in 2023. Average metro-wide effective rents at fourth quarter 2023 are $2,212, or $2.42 per SF. Effective rents average $2,328 ($2.83 per SF) for the city of Philadelphia (primarily in mid- and high-rise product) and $2,152 ($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.
