Amidst a national trend of companies downsizing office spaces over three years, the Philadelphia metropolitan area stands out for its resilience compared to several other major U.S. office markets. Although Philadelphia witnessed the return of nearly 2 million square feet to the office leasing market in the past year, nine out of the 15 largest office metropolitan areas saw even higher levels of unutilized office space returned by occupants.
This analysis focuses on absorption rates, indicating the rate at which occupied space changes over time. The annual absorption rate, calculated by dividing a market’s 12-month net absorption by its total office space, offers an alternative view of leasing performance while considering differences in market sizes. For instance, a loss of 1 million square feet in absorption holds distinct implications for an office market like New York City, boasting 980 million square feet, compared to Philadelphia’s 330 million square feet of office space.
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