Vacancies in the Philly office space market remained steady at the end of the fourth quarter 2014, closing out the year at 10.8%, according to a new market trend report from the CoStar Group.
The Philadelphia office space vacancy rate for the fourth quarter was unchanged from the third quarter 2014, the CoStar Group’s Fourth Quarter 2014 Market Report said.
Net absorption stood at positive 408,343 square feet of office space in Philadelphia for the fourth quarter, CoStar said. In comparison, net absorption at the end of the third quarter was 319,373 square feet of office space in Philly, according to the report.
Vacant sublease space in the Philly office space market dropped in the fourth quarter, with 1,363,785 square feet of office space in Philadelphia at quarter’s end, the market trend report said.
CoStar identified three notable tenants that moved into large blocks of Philadelphia office space in 2014, according to the report. Those tenants were: L3 Communication Systems-East, moving into 233,333 square feet in the Philly office space market at Camden Innovation Campus; The Vanguard Group, moving into 204,000 square feet of office space in Philadelphia at Great Valley Corp Center; and Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet of office space in Philly at 1818 Beneficial Bank Place.
Rental rates for office space in Philadelphia increased in the fourth quarter, ending the year at $21.80, CoStar reported.
Two buildings delivered to the market for office space in Philly in the fourth quarter, according to the report, bringing 343,850 square feet to the Philadelphia office space market. Another 2,966,000 square feet still of Philly office space remained under construction at quarter’s end, CoStar said.
In comparison, the national office market vacancy rate dropped to 10.9% from the third quarter to the end of the fourth, CoStar said. Net absorption was positive 37.53 million square feet for the fourth quarter, the company reported. Average rental rates for the national market grew to $22.65 by year end and 194 buildings comprising nearly 15.9 million square feet delivered to the national market in the fourth quarter, the report noted.
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