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1Q03 Office Data Reveals 'Mixed Signals' in CBD

PHILADELPHIA-Office leasing activity in the opening quarter of this year is

By Marita Thomas | Updated on May 16, 2003

PHILADELPHIA-Office market activity in the CBD produced mixed signals duringthe first quarter of this year, according to research from the local officeof Trammell Crow Co. During a “noticeable lull,” the overall vacancy raterose slightly to 13.7%, impacted by rising unemployment and the consequentaddition of sublease space. The amount of leasing activity in first quarterwas just half the activity in fourth quarter 2002.

Though current demand is weak, reports Bill Luff, SVP ofthe TCC office here, “rental rates are up for class-A product and down fortrophy product.” Although vacancy in the trophy building sector has notfluctuated much, he predicts it will as some tenants shift from trophy toclass-A space.

The average asking rental rate in the class-A office sector inched up to$22.17 per sf, compared with $22.09 per sf at year-end 2002. Luff notes,”this is still significantly less than the $23.11-per-sf rate at this timelast year.”

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