Between the first quarters of 2020 and 2024, the Philadelphia commercial real estate market exhibited diverse trends in its major sectors—retail, industrial, multifamily, and office. Retail defied expectations, experiencing consistent demand and decreasing vacancy, while the industrial and multifamily sectors encountered supply challenges due to a recent development boom.
Contrary to projections, the retail sector demonstrated resilience during the pandemic, with a declining vacancy rate since early 2020. Strong consumer spending, driven by stimulus checks and increasing wages, coupled with limited new retail construction, fueled demand for retail space. Favorable conditions, including low-interest rates and easy access to capital, facilitated retail expansions, resulting in improved absorption rates across the Philadelphia region.
Consequently, Philadelphia’s retail vacancy decreased by 0.4% to 4.2% in the first quarter of 2024, reaching the lowest level since CoStar began tracking data in 2006.
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