Philadelphia I-81/78 Corridor Industrial Market
In 2024, the delivery of industrial space amounted to just under 4.5 million square feet, representing the lowest volume of new constructions since 2013. Meanwhile, year-to-date absorption has measured 673,298 square feet, but vacancy still ended up 130 basis points higher than this time last year due to the 4.5M square feet worth of construction deliveries. During the fourth quarter of 2024, industrial construction starts totaled 875,034 square feet, marking the first time since the second quarter of 2015 that quarterly groundbreakings fell below 1.0 million square feet. As of the fourth quarter of 2024, the annual average asking rent declined by 0.8%, following four years of historically high rent growth, backed by decreasing class B and C asking rates. Class A asking rates remained essentially unchanged from the third to the fourth quarter. A moderation in demand, coupled with a surge in new supply and a rapid increase in sublease availability, has realigned the current rate of rent changes with pre-pandemic averages.