After five years of declining demand, Philadelphia’s office market is showing early signs of stabilization as 2025 begins. While not yet in recovery, recent data indicates a positive shift. For the first time since 2018, annual net absorption—measuring move-ins versus move-outs—has turned positive, with office occupancy rising by 615,000 square feet across the Philadelphia metro area.

From 2019 to 2023, local businesses vacated 7.6 million square feet of office space amid uncertainties about the future of work. Though recent gains don’t fully offset those losses, they mark a critical step toward stabilization and eventual recovery. Interestingly, this improvement occurred alongside a decline in demand from life science companies, which had been a key driver for the market. This suggests that traditional office sectors are stabilizing independently of life sciences.