Philadelphia’s retail sector continues to lag behind other major U.S. markets when it comes to rent growth. In the third quarter, the region placed 13th out of the top 15 metropolitan markets for annual asking rent increases, reflecting slower momentum compared to peers.
A combination of weakened demand in the spring and a shortage of modern retail spaces has constrained the market’s performance. Only 7.2% of the area’s retail inventory has been built since 2010 — less than half the national average of 15% — leaving Philadelphia with limited access to newer, higher-quality properties that typically command premium rents.
This lack of updated supply has kept structural rent growth subdued, with even peak periods failing to push annual gains beyond 3.2%. Landlords are finding it difficult to justify higher rates when competing with other markets offering newer developments and more desirable amenities.
As a result, the city’s older retail stock continues to hinder pricing power, underscoring the need for fresh development and modernization to attract tenants and elevate rental performance in the years ahead.
Wolf Commercial Real Estate (WCRE), is a leading New Jersey, Pennsylvania, and New York commercial real estate brokerage, advisory and property management firm that specializes in healthcare, office, retail, land, industrial, and investment properties. For more information commercial properties, please call 856-857-6300 or send an email to info@wolfcre.com.
Please visit our website for a full listing of commercial properties for lease or sale through our commercial real estate brokerage firm.
