Newmark Real Estate (Newmark) is pleased to release it’s second quarter 2022 Greater Philadelphia, Southern New Jersey and Delaware office market reports.
Philadelphia Office Market
While full job recovery in Philadelphia has not yet come to fruition, conditions created by the pandemic are waning. Consequently, more workers are returning to their place of employment and the office market is beginning to show signs of improvement. According to Kastle Systems’ June 2022 weekly occupancy barometer, 38.2% of Philadelphia’s workforce has made a return to the office. This is up from the 37.4% occupancy rate experienced during the first quarter of 2022. Despite the improvement quarter-over-quarter, the Philadelphia metro continues to lag the current major metro average of 44.2%. Comparatively, New York has seen 42.5% of its workforce return to the office.
Southern New Jersey
During Q2’ 2022, the Southern New Jersey office market continued to build upon positive signs initially observed in the first quarter of 2022. Health and safety concerns stemming from the Omicron variant have subsided, removing a hurdle many businesses faced for over two years. Activity is increasing throughout the region as employers are announcing and implementing return-to-office policies on a scale not seen since the beginning of the pandemic. However, things in the office sector remain fundamentally different than they were in the pre-COVID era. Employee preference for remote work, coupled with an increasingly tight labor market have given workers the upper hand and rented offices sit nearly vacant in many instances. This dynamic has the potential to negatively impact demand for office space for the foreseeable future.
Wilmington, Delaware Office Market
The New Castle County office market experienced a downturn in the second quarter of 2022, with absorption losses being recorded in all submarkets. Health and safety complications associated with the Omicron variant are in the rearview mirror, leading employers to finalize return-to-office policies. According to a national survey by WFH Research, only 10.7% of employees are without a clear directive by management regarding future working arrangements. This is the lowest level recorded since the survey began in January 2021. 51.4% were ordered to return to the office fully, while 37.9% reported a mix of hybrid and fully-remote policies. Through this data, it is possible to predict future office market conditions.