The Philadelphia regional industrial market recorded its 12th consecutive quarter with occupancy growth, with a slight increase in vacancy driven by 2.2 million square feet of deliveries outpacing demand, as reported in Newmark Grubb Knight Frank’s newly released Q3 Philadelphia regional industrial research report. Since the cyclical trough, tenants in the market have absorbed roughly 20 million square feet of space, trimming 180 basis points from the market-wide vacancy rate, which settled at 9.1% as the third quarter came to a close.
“Robust leasing activity and tenant expansion continues to remain the norm in the Philadelphia market.
We remain bullish on prospects for 2013 and have reached the market cycle inflection point, and are now transitioning from recovery to expansion,” noted Bob Clements, executive vice president, managing director of the Philadelphia region for Newmark Grubb Knight Frank.
Key statistics for the Philadelphia-area industrial market during the third quarter of 2012 are as follows:
• There are a total of 12 projects under construction totaling 6.2 million square feet.
• The warehouse/distribution sector accounted for 80% of year-to-date positive absorption, while seemingly heavily skewed, it is less than the 93% market share this sector had in 2011.
• The Philadelphia regional industrial market is one of the nation’s largest, comprising 8,500 properties totaling 763 million square feet.
• Lancaster County claimed title to the market with the lowest vacancy of 2.5%.
Evidence of the region’s attractiveness to logistics-related end users, the Central Penn. and Lehigh Valley submarkets accounted for two thirds of the year-to-date positive absorption total. Third quarter and 2012 results mirror the established trend of logistics-focused markets being the engine of growth for the broader market. Looking forward, the I-81/78 corridor will continue to heavily influence both supply and demand market dynamics.
To access the full Philadelphia industrial reports, visit /research.
To speak with one of the company’s local market experts, please contact Mira Matic at mira@miramaticpr.com.
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A part of BGC Partners, Inc. (NASDAQ:BGCP), Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC’s financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world’s leading financial institutions.
Newmark Grubb Knight Frank, together with its affiliates and London-based partner Knight Frank, employs more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.