Philadelphia Retailers Downsize Store Requirements, Leading to Smaller Average Retail Lease Sizes

The trend of diminishing retail lease sizes continues in the Philadelphia metropolitan area, spurred by the COVID-19 pandemic’s ongoing impact. In 2023, the average retail lease size shrank by nearly 20% compared to 2018. Simultaneously, major big-box retailers are adjusting their site preferences. While a dozen retail leases for spaces exceeding 50,000 square feet were signed in 2018, this number dwindled to just five annually in both 2022 and 2023.

This shift toward smaller retail spaces is primarily driven by the allure of lower operational expenses. Smaller stores typically entail reduced costs for rent, utilities, and staffing, fostering enhanced cost efficiency. This becomes especially advantageous for retailers navigating a fiercely competitive market, striving to maintain profitability amid challenging conditions.

*Article courtesy of Costar

For more information about New Jersey or Philadelphia health care space, industrial space, retail space, office space, land or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 or send an email to Wolf Commercial Real Estate, is a leading New Jersey and Philadelphia commercial real estate broker that specializes in healthcare, office, retail, land, industrial, and investment spaces.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm that provides a full range commercial real estate listings and services and property management services for landlords, owners, investors, tenants and more.

As experts in both Philadelphia and New Jersey commercial real estate listings and services, the WCRE team provides ongoing detailed information about commercial properties to our clients and prospects to help them achieve their real estate goals.