The vacancy rate for the Philly office space market increased in the first quarter 2014, ending the quarter with a Philadelphia office space vacancy rate of 11.2% , according to a new market trend report from the CoStar Group.

The vacancy rate rose over the previous quarter, the report said, with net absorption totaling negative 324,914 square feet of office space in Philadelphia in the first quarter 2014.  In comparison, net absorption equaled positive 1,217,600 square feet of office space in Philly in the fourth quarter 2013, according to CoStar’s First Quarter 2014 Market Report.

Co-Star also reported that vacant sublease space in the Philadelphia office space market increased in the first  quarter, ending at 1,368,152 square feet.

According to the report, tenants moving into large blocks of space in 2014 include: The Harrisburg University of Science & Technology, moving into 149,820 square feet of office space in Philadelphia at 326 Market Street; Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet of office space in Philly at 1818 Beneficial Bank Place; and BioTelemetry, Inc. moving into 46,972 square feet of Philly office space at 1000 N Cedar Hollow Road.

A total of five buildings delivered to the Philadelphia office space market in the quarter, Co-Star reported.   Those five building totaled 131,624 square feet of office space in Philadelphia, the report said.  Another 1,194,598 square feet of office space in Philly was still under construction at the end of the first quarter 2014, according to the report.

In comparison to the quarterly results in the Philly office space market, the U.S. National Office vacancy rate dropped to 11.5% from the fourth quarter 2013, CoStar said, with net absorption totaling positive 21.68 million square feet in the first quarter. Average rental rates nationally increased to $22.17, and 321 buildings delivered to the market totaling more than 15.1 million square feet, CoStar reported.

For more information about office space in Philly or any Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philly office space.

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