Q4 2023: Philadelphia Office Market Report

As the ninth-largest office market in the US, Philadelphia has shown resilience in the post-pandemic office market. Despite the hurdles presented by the ongoing office transformation, Philadelphia maintains a 15.1 percent availability rate, lower than the national index of 16.5 percent. While office leases continue to be predominantly signed by institutions and companies in healthcare, life sciences, legal, and financial sectors, companies committing to hybrid and remote work policies are justifying a downsize in square footage between 20 and 60 percent.

Office landlords will experience pressure to retain existing and attract new tenants, especially as lenders become more stringent. Overall leasing activity continues to slow, offering tenants the opportunity to benefit from increased competition among landlords offering trophy and class A properties. Tenants are prioritizing amenities and collaborative workspaces in their search for spaces that can entice employees back to the office.

In downtown Philadelphia, the Rothman Orthopaedic Institute has announced plans to consolidate its administrative offices and clinical space to 833 Chestnut St. Concurrently, the advertising agency LevLane has moved its Center City headquarters to One Logan Square, departing the Wanamaker Building, which entered receivership in September.