The First Half of 2016 Exhibits Steady Growth Across Philadelphia Region’s Office Market

Philadelphia, PA (July 14, 2016) — Newmark Grubb Knight Frank (NGKF) released its second quarter 2016 office reports for the greater Philadelphia region this week. Greater Philadelphia’s overall vacancy ticked up 20 basis points quarter-to-quarter, to 14.8 percent. Strong activity in the Suburban submarkets contributed to the region’s 299,084 square feet in quarterly occupancy gains. In Philadelphia’s Central Business District (CBD), the 622,000-square-foot FMC Tower delivered 75.0 percent pre-leased. FMC vacated 200,000 square feet at 1735 Market Street in the second quarter 2016 to occupy 250,000 square feet at the new West Market Street submarket trophy property. Additionally, the University of Pennsylvania committed to 100,000 square feet at the building.

The redevelopment of East Market’s 34 South 11th Street and West Market’s One Franklin Tower will deliver, in total, almost 400,000 square feet over the next 12 months and add much needed large blocks of office space to the market. Wayne Fisher, NGKF executive managing director remarked, “Tenants desiring premium space, particularly in the centralized West Market Street submarket, will assure that trophy-quality product when added to the market, will not remain available for long.” During the quarter, Vue32, a $56 million, mixed-use development located in the University City submarket broke ground. Also in development news, details were released on Schuylkill Yards, a University City-based, joint venture between Drexel University and Brandywine Realty Trust. The future $3.5 billion mixed-use community is projected to add 5.0 million square feet of residential, office, retail, educational facilities and research laboratories to the core over two decades.

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