Early signs may be surfacing of a resurgence in Independence Hall’s office market in Philadelphia.

Throughout 2015 and 2017 Independence Hall was an outlier with noticeably higher vacancies than other submarkets in and around the Philadelphia office space central business district (CBD) such as Market Street West and University City. These higher vacancies were caused by move outs by both government and private sector tenants including the U.S. Navy, the GSA and Dow Chemical.

Independence Hall’s concentration of older office buildings and its distance from key center city regional rail stations are potential Philly office space drawbacks from many office tenants’ perspective. However, a slew of office renovations, restaurant/bar openings and high-end residential construction are now coalescing in what was once a relatively sleepy submarket.

This report on U.S. and Philadelphia commercial properties, being made available through Philadelphia commercial real estate broker Wolf Commercial Real Estate – a Philadelphia commercial real estate brokerage firm, is part of the Market Insights series from the CoStar Group research organization. These periodic reports provide a snapshot of recent real estate trends. CoStar monitors commercial real estate across 390 metro areas and analyzes the economic trends that move these markets.

Since 2014, Keystone Property Group has re-energized the ground floor of 100 Independence by bringing Independence Beer Garden — which includes outdoor seating and a gaming area — and modernist café La Colombe. One block away, MRP Realty’s newly-renovated Bourse — previously home to the nation’s first commodity exchange — is reopening this fall with an impressive array of new dining and drinking options on the ground floor. Coworking operator Make Offices also recently leased 35,000 square feet of Philadelphia office space on the property’s 5th floor.

More than 850 new, high-end apartment units have either completed or broken ground in the Philly office space submarket of Independence Hall over the past five years. Parkway Corporation recently completed its Civic Design review for a proposed 278-unit apartment tower at 709 Chestnut. Toll Brothers is also planning an 85-unit condo development on the 700 block of Sansom Street.

These improvements to Independence Hall’s ambience and amenity offerings are beginning to bear fruit for office owners. A handful of large Philadelphia office space leases including Macquaire Investment Management, Five Below and a few coworking operators have been signed in recent years. These leases, combined with conversions of older office space into apartments, have helped bring Independence Hall’s office space availability rate — the percentage of space being marketed for lease — back in line with other Center City submarkets in 2018.

Given Independence Hall’s complete lack of new office construction, the submarket’s availability rate has nowhere to go but further down if tenants’ interest for Philly office space in the area continues to rebound. It will be interesting to see just how much more tenant interest Independence Hall can garner in the years ahead.

For more information about Philadelphia office space or other 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.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space with the Philadelphia commercial properties that best meet their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties and Philadelphia commercial real estate listings for lease or sale through our Philadelphia commercial real estate brokerage firm.

Most Philadelphia office space brokers and investors consider Market Street West – the portion of Market Street running from City Hall to 21st Street – as Center City’s premier office district, and with good reason.

Public transit access is exceptional along that corridor, which is home to more than 12 million square feet of Philly office space; this is more than double the amount of office space located on other major Center City thoroughfares such as JFK Boulevard, South Broad Street, or Market Street East.

This CoStar report is being offered through Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm specializing in Philadelphia commercial real estate listings.

However, Market Street West’s concentration of modern office skyscrapers has made it a favorite among large, publicly traded companies based in Philadelphia, a feature which is both a blessing and a curse for local office landlords dealing in Philadelphia office space.

Clearly, Market Street’s popularity among large tenants is a plus for landlords that can retain them. Giant long-term leases by companies such as Independence Blue Cross or Beneficial Bancorp help some office owners keep large portions of their Philly office space properties filled for years or even decades on end.

The problem is that thanks to high business costs, Center City’s Philadelphia office space does not have a strong track record when it comes to attracting and retaining large corporate headquarters. Many of Philadelphia’s largest white-collar employers such as Sunoco, Dow Chemical and PNC have all either vacated or downsized their Market Street office space in recent years as part of cost-cutting efforts.

The result is that, in terms of the percentage of office availability rates, Market Street West does not stand out as a particularly tight Philly office space market today.

The tightest Philadelphia office space micro markets (in terms of both physical vacancy rates and percentage of space listed as available for lease) are currently Rittenhouse Square and Logan Square. Both are located a few blocks off Market Street and are home to some of Center City’s most coveted public greenspaces.

In contrast to Market Street West, the bulk of Philly office space stock in the Rittenhouse Square area is comprised of office properties located along Walnut Street, smaller than 350,000 square feet and built before 1970.

These properties cater almost exclusively to tenants looking for Philadelphia office space of less than 15,000 square feet, often in industries like legal services, healthcare, and accounting. These mostly privately-held firms do not face the same scrutiny from public shareholders and as a result, are less likely to relocate out of Center City to cut costs.

From an owner’s perspective, one downside associated with owning these older, smaller Philly office space properties is the constant time and money spent shuffling tenants in and out, as having smaller tenants means more lease expirations.

However, these Philadelphia office space properties have maintained higher average occupancy rates in recent years than most of the newer skyscrapers along Market Street. As a result, available office space is also harder to find in and around Rittenhouse Square and Logan Square than it is in any other major office district of Center City.

For more information about Philly office space or other 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 Philadelphia office space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space with the Philadelphia commercial properties that best meet their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties and Philadelphia commercial real estate listings for lease or sale through our Philadelphia commercial real estate brokerage firm.

The U.S. office market, including Philly office space property, continued to benefit from strong fundamentals going into 2018, despite continued deceleration in net absorption, occupancy, and rental rate growth.

With robust corporate profits and continued office-using job growth, that trend is expected to hold through the year as the recently approved tax cuts and expected gradual increases in interest rates make U.S. office space, Philadelphia office space, and other institutional-grade property types an attractive place for investors to park capital and get cash flow.

This CoStar report is being offered through Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm specializing in Philadelphia commercial real estate listings.

“You’re going to like GDP growth over the next few months,” CoStar Portfolio Strategy’s Hans Nordby said during CoStar’s year-end 2017 State of the U.S. Office Market report, co-presented with managing consultant Paul Leonard. “Corporate profit growth is a good story, and if you already think it’s strong, look underneath the hood. It’s even better.”

The improved profit growth outlook for the services sector and other industries that drive demand for U.S. office space and Philly office space, along with expected higher GDP growth projected at a very strong 2.5% to 3% in the next few months, should help office job growth hold steady at strong levels for the next few month, Nordby said.

The rate of vacancies in U.S. office space markets, including Philadelphia office space, held steady at 10.1% at the end of the fourth quarter 2017, unchanged from the same period a year prior, despite a large amount of new supply and a 20% decline in office net absorption to 65 million square feet for 2017.

Meanwhile, the total amount of office property acquired by investors declined about 15% in 2017 from the prior year, largely due to a sharp drop in office trades in New York City, in Philly office space, and in other gateway markets.

Despite the declining sales volume, average prices in primary markets – such as those involved in Philadelphia office space – continued to rise, prompting investors to fan out into secondary markets such as suburban Phoenix, where Transwestern Investment Group and JDM Partners acquired Marina Heights, State Farm’s office campus in Tempe, AZ, for $930 million at $459 per square foot.

Leonard sees the vacancy rate involving both national and Philly office space ticking up beginning this year through 2020 as the expected new supply of space finally begins to outpace demand.

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

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space with the Philadelphia commercial properties that best meet their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties and Philadelphia commercial real estate listings for lease or sale through our Philadelphia commercial real estate brokerage firm.