Click here to view with images.
To ensure delivery to your inbox, please add cbrepennsylvaniaresearch@cbre.com to your address book.
 
CBRE
Figures
  | 
Greater Philadelphia Region | 2Q 2023
Greater Philadelphia Region Figures Reports
CBRE RESEARCH
 | 
Q2 2023
Click on the links to reports below to discover emerging trends in commercial real estate within the greater Philadelphia Region.
PA I-78/I-81 Corridor Industrial Figures Report
Starting around 8 years ago, the market showed signs of sustained equilibrium when overall vacancy tended closely around the 6% mark, mostly staying within 100 basis points (bps) during that time. Spurred by the pandemic, higher rates of online shopping, tighter labor markets, and government stimulus resulted in significant supply/demand imbalance within the PA I-78/I-81 Corridor's logistics market. From 2021 through mid-2022 vacancy fell 340 bps to 3.5%, the lowest historical measure. In reaction, developers broke ground on projects at a pace that pushed overall construction over 37 million square feet (sq. ft.) by Q2 2022. Since then, both supply and demand cooled.
Philadelphia Industrial Figures Report
As demand from retailers and wholesalers nearly vanished while overall lease sizes shrunk, construction projects in the pipeline continued to deliver, pushing overall vacancy up to 4.7%, 130 basis points (bps) higher than one year prior. Personal consumption expenditures as measured by the U.S. Bureau of Economic Analysis showed spending moving sideways since the start of the year, easing upward pressure on demand. Consumer behavior continued to persist toward pre-pandemic norms producing similar pre-pandemic spending growth trends. Overall, market fundamentals followed suit as both net absorption and vacancy trended toward pre-pandemic levels.
Philadelphia Life Sciences Figures Report
The Philadelphia Life Sciences market experienced a reduction in overall leasing, development, and tenant demand at the end of the first half of 2023. The slowdown, largely a symptom of the general investment pause driven by the Federal Reserve’s increased interest rates, remained a consistent theme in recent quarters. In parallel, new development announcements slowed because of tall barriers to finance projects and stalled demand from early-to-mid stage companies due to fundraising challenges. The phenomenon of tenants pausing requirements until investment was secured took place in other markets throughout the country as well.
Philadelphia Office Figures Report
In 2022, the Philadelphia office market appeared to be approaching a recovery, which never came to fruition. Since then, the market further softened as rising vacancy persisted across all Philadelphia submarkets, amounting to a vacancy rate of 22.1% for the region. At the start of 2023, the office market saw numerous instances of downsizing at lease expiration and offloading excess space via sublease offerings. These trends were maintained throughout the second quarter, with over 1.2 million sq. ft. of space being vacated by tenants.
Philadelphia Retail Figures Report
Despite ongoing economic uncertainty, in the second quarter of 2023 the Philadelphia retail leasing market continued to trend in the right direction achieving its sixth consecutive quarter of positive net absorption. While occupancy growth is only one-third of that tallied during the first half of 2022, supply remained constrained throughout the metro as the overall availability rate fell 30 basis points (bps) to 7.5%, ileasing and investment markets were not immune to the negative effects of federal interest rate hikes, inflation and economic uncertainty, overall the region remained an attractive environment for retailers and ts lowest measure post-pandemic. While Philadelphia’s retail investors alike – a demonstration of the region's resiliency and reputation for stability.
Unsubscribe

 You may also unsubscribe by calling toll-free +1 877 CBRE 330 (+1 877 227 3330).

Please consider the environment before printing this email.

CBRE respects your privacy. A copy of our Privacy Policy is available online. For California Residents, our California Privacy Notice is available here. If you have questions or concerns about our compliance with this policy, please email PrivacyAdministrator@cbre.com or write to Attn: Marketing Department, Privacy Administrator, CBRE, 200 Park Ave. 19-22 Floors, New York, NY 10166.

CBRE, Inc.
Address: 50 S 16th St Suite 700, Philadelphia PA 19102
Licensed Real Estate Broker

CBRE, Inc. is a commercial real estate services firm.

© Copyright 2025. All rights reserved. This report has been prepared in good faith, based on CBRE's current anecdotal and evidence based views of the commercial real estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are subject to significant uncertainties and contingencies, many of which are beyond CBRE's control. In addition, many of CBRE's views are opinion and/or projections based on CBRE's subjective analyses of current market circumstances. Other firms may have different opinions, projections and analyses, and actual market conditions in the future may cause CBRE's current views to later be incorrect. CBRE has no obligation to update its views herein if its opinions, projections, analyses or market circumstances later change.

Nothing in this report should be construed as an indicator of the future performance of CBRE's securities or of the performance of any other company's securities. You should not purchase or sell securities-of CBRE or any other company-based on the views herein. CBRE disclaims all liability for securities purchased or sold based on information herein, and by viewing this report, you waive all claims against CBRE as well as against CBRE's affiliates, officers, directors, employees, agents, advisers and representatives arising out of the accuracy, completeness, adequacy or your use of the information herein.

CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE.

Photos herein are the property of their respective owners. Use of these images without the express written consent of the owner is prohibited.