Philadelphia’s industrial boom is winding down after a record-breaking five years that added 55 million square feet to the region’s inventory. As of March, 12.4 million square feet remain under construction, a 52% drop from the early 2023 peak.
This slowdown follows a national trend driven by rising vacancies. Half of the 32 million square feet delivered in the past two years remains unleased, and 80% of the current development pipeline is speculative with no secured tenants.
As a result, Philadelphia’s industrial availability rate has climbed 420 basis points since mid-2022, reaching 10.4%—80 basis points above the national average. Many landlords, facing unexpected carrying costs, are now more willing to subdivide spaces to attract tenants.
Leasing timelines have also stretched, with the median time to secure a tenant rising from 4.7 to 7.3 months. In response, new industrial construction has plummeted, with just 1.7 million square feet breaking ground in late 2024—the lowest level since 2018.
Despite ongoing development adding 1.9% to existing inventory—outpacing the national 1.5% rate—the slowdown suggests reduced supply entering the market by 2026, allowing demand to catch up with the 30 million square feet added since mid-2022.
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