Newmark Real Estate (Newmark) releases fourth quarter 2022 Greater Philadelphia and I-81/78 Corridor industrial market reports
Newmark Real Estate (Newmark) is pleased to release its fourth quarter 2022 Greater Philadelphia (inclusive of Southeastern Pennsylvania, Southern New Jersey and Delaware) and I-81/78 Corridor industrial market reports.
Activity in the Philadelphia industrial market was vigorous in 2022. The occupancy rate across all tracked markets and submarkets remains above 96%. Year-to-date absorption closed out the year at 13.3 million square feet of positive absorption, topping 2021’s total by nearly 3 million square feet. Asking rental rates climbed further northward in 2022 to an average asking rate of $8.27/SF, up from $7.66/SF a year ago. Construction activity remains robust, with 26.0 million square feet under construction and 11.3 million square feet of new product delivered in 2022.
Activity in the I-81/78 industrial market remains strong. New speculative development that delivers each quarter continues to lease up rapidly as the combined occupancy rate across all three submarkets is nearly 95%. Supply chain issues and high construction costs continue to be a challenge for developers, as some proposed projects have been pushed out to later in 2023; however, demand from tenants in the market for sizable blocks of space remains strong. With so much new product coming online, a possible slowdown could be looming as experienced in other markets; however, for the time being, conditions remain favorable in the I-81/78 industrial market. Rental rates continue to climb to record highs; however, some older product available in the market continues to drag rents down. Class A rental rates have risen significantly over the past two years, garnering the most activity by tenants in the market.