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Office Vacancy in Center City Rises to 13.7%

PHILADELPHIA-For the fifth consecutive quarter, office rental space in the CBD experience negative absorption, according to principals at Trammell Crow's local office. Total office leasing activity in second-quarter 2002 is down 61% from 2001.

By Marita Thomas | Updated on July 30, 2002

PHILADELPHIA-The office sector of Philadelphia’s Central Business District continues to soften, according to Bill Luff, senior vice president of the Conshohocken, PA-based Pennsylvania office of New York-based Trammell Crow Co. Reporting on second-quarter 2002 activity, Luff says the overall office CBD vacancy rate is 13.7%, up from 9.48% at the end of the second quarter of 2001.

“Additional sublet space fueled the increase in the current vacancy rate, and has pushed the market away from the market equilibrium the CBD was experiencing 12 months ago,” Luff says.

As a result, the average rental rate for class-A office space in Center City has dropped to $22.60 per sf, according to Luff’s report. That is 11.9% lower than the asking rental for such properties at year-end 2001. According to his company’s research, there are now seven class-A properties with space availabilities of more than 100,000 sf. Together, the available space in those buildings represents more than 30% of the CBD’s total class-A and class-B office vacancy.

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