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Region's Office Vacancy Rate Pops Up to 16.3% in 1Q

PHILADELPHIA-After dropping to 15.1% in fourth-quarter 2002, the region's

By Marita Thomas | Updated on May 30, 2003

PHILADELPHIA-First-quarter statistics for the overall region’s office market show a significant uptick from the drop to a 15.1% vacancy in the final quarter of last year to 16.3%. The opening negative quarter for office leasing in the region pushed vacancy to “a level unseen since 1995,” according to Matthew Guerrieri, senior research manager of the local office of Grubb & Ellis.

Not all submarkets suffered alike. The vacancy rate for the CBD fell back to 13.2%, the same level as third-quarter 2002. “It remains five percentage points lower than the peak it reached in 1993 during the aftermath of the last recession,” Guerrieri notes.

“No single tenant contributed significantly to the reversal in occupancy this quarter,” he says. “But the cumulative effect of numerous tenants losing space resulted in the total vacancy rising above 5 million sf, a figure approximately 100% higher than during the CBD’s tightest point in December 2000.”

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