Q4 2023: Philadelphia Industrial Market Report
Greater Philadelphia continues to be one of the nation’s fastest-growing industrial markets. As of the fourth quarter, the market leads the Northeast and Mid-Atlantic industrial markets in terms of deliveries (21.7 million square feet) and annual absorption (7.3 million square feet). The region includes the highest levels of construction underway at 12.1 million square feet. New construction is causing an uptick in vacancies. Sublease space continues to increase as tenants have excess warehouse capacity resulting from the rapid absorption from 2020 - 2022.
Vacancies expanded to 6.7 percent as new warehouse supply outpaced overall demand. The area’s annual rent growth of 7.7 percent remains ahead of the national average. Despite demand, industrial properties in Greater Philadelphia remain a cost-effective option for occupiers when compared to the NYC Metro and Northern / Central New Jersey.
In New Jersey, Exit 8A continues to be tight at 3.8 percent vacancy. South Jersey, however, has seen the largest increase in vacancies in the region, led by Burlington County at 12.7 percent, due to a remarkable 7.8 million square feet of deliveries in 2023.
New Castle County DE maintains a healthy 4.4 percent vacancy rate, however, there are 2.5 million square feet under construction, equating to 6.6 percent of the existing inventory.
Vacancies expanded to 6.7 percent as new warehouse supply outpaced overall demand. The area’s annual rent growth of 7.7 percent remains ahead of the national average. Despite demand, industrial properties in Greater Philadelphia remain a cost-effective option for occupiers when compared to the NYC Metro and Northern / Central New Jersey.
In New Jersey, Exit 8A continues to be tight at 3.8 percent vacancy. South Jersey, however, has seen the largest increase in vacancies in the region, led by Burlington County at 12.7 percent, due to a remarkable 7.8 million square feet of deliveries in 2023.
New Castle County DE maintains a healthy 4.4 percent vacancy rate, however, there are 2.5 million square feet under construction, equating to 6.6 percent of the existing inventory.