The latter occurred because of relocations from Downtown Manhattan following the Sept. 11, 2001 terrorist attacks, researchers note.
Philadelphia's vacancy rate is 2.6 percentage points below the national average and compares with Boston's year-end vacancy rate of 13.7% and Downtown New York at 16.1%.
The vacancy rate in Washington, DC, however, stood at 9.4%, according to Grubb & Ellis research.
While there was a "dramatic softening" of rental rates in class-A office properties throughout the Northeast, Philadelphia's "class-A1" office market realized a slight increase from an average of $26.38 per sf at year-end 2001 to an average of $28.25 at year-end 2002.
Grubb & Ellis distinguishes between class-A1 properties here, which are trophy buildings, built primarily after 1982, and class-A2 buildings along Market Street. An historic gap between the asking average rental rates at class-A1 and A2 properties justifies the distinction. For nearly a decade, the gap has been at least $2 per sf, and, since 1994, the asking average at class-A1 buildings has held at $5 per sf above the asking average in class-A2 buildings.
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