The metro market is considered "destination oriented," Torosian says, attractive to companies "with a need to be located in or near the Philadelphia CBD." The most stunning example is a new Federal Express 110,000-sf distribution center in South Philly, which opened this year, primarily serving Center City and University City. Construction costs were estimated at $15 million.
On the other side of town, Pennexx Foods bought a 145,000-sf building for just over $2 million, or about $14 per sf, and expects to spend $8 million on renovations.
Many industrial properties here have been designated Keystone Opportunity Zones, which provides generous tax abatements. Yet, "the trends still indicate companies locating outside the market in order to enhance (their) operational efficiencies," Torosian says.
The average asking rental rate for Philadelphia County industrial space is $4.35 per sf, unchanged from the previous quarter. Of the 13.8 million sf of industrial space available in the second quarter, 75,000 sf is sublease space.
Larry Maister, vice president, and Marie Connell, senior associate of Trammell Crow's Philadelphia office, participated with Torosian in the research report.
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