Philadelphia’s office market is showing signs of stabilization as tenant movement continues easing from its mid-2025 peak. Office churn has declined to approximately 26 million square feet across the market. Churn measures both tenant move-ins and move-outs, providing insight into overall movement within the office sector.
Unlike net absorption, churn does not measure whether occupied space increased or decreased. Instead, it shows how actively companies are changing locations or adjusting their footprints.
Recently, Philadelphia office move-ins have remained relatively steady. However, fewer tenants are moving out of existing space. That decline suggests many companies have completed the major space decisions that followed the pandemic.
Additionally, many leases signed before 2020 have now reached renewal or expiration. As those decisions work through the market, fewer companies appear to be making significant footprint reductions. The change is also contributing to stronger office absorption.
Trailing four-quarter net absorption reached approximately 650,000 square feet by mid-2026. That means occupied office space increased overall during the period.
Meanwhile, Philadelphia has very little new office construction underway. Limited development continues restricting the supply of newer, premium office space available to tenants.
Consequently, companies looking to upgrade their offices have fewer options than during previous development cycles. That limited availability could also encourage existing tenants to remain in place.
Furthermore, steady leasing combined with fewer move-outs could create greater stability for office landlords. The trend does not eliminate the challenges facing Philadelphia’s office sector. However, it represents a shift from the widespread downsizing that shaped the market in recent years.
Philadelphia’s office market is increasingly being driven by more measured leasing decisions and greater tenant stability.
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