"Buyers will remain focused on established properties near arterial roadways in submarkets with strong residential and retail bases, such as King of Prussia and Exton/Malvern," Spencer Yablon, regional manager of the Philadelphia office of Marcus & Millichap, says in a prepared statement.

Nearly 450,000 sf of medical office space came into the market over the past 12 months compared to last year which saw only 120,000 sf added. Medical vacancy sits at 12.2% at the end of the second quarter, according to the report. Asking rents for medical office space are at $21 per sf, a 4% decline. The report attributes this fall to increased space on the market.

Developers have put about 1.9 million sf of new space out this year, compared with the one million during the past year, according to the report. The report also mentioned the Comcast Center as a boon to the enter City office market. The $500 million development put an additional 1.3 million sf to the area.

"The fact that the Comcast Center has grown from 450,000 sf to one million sf is only good for the city. It has definitely had a positive impact on the city," says Jarjisian.

John Derham, who heads Cushman & Wakefield's Philadelphia office, echoes Jarjisian's and the report's statements. Derham told GlobeSt.com late July Comcast Center's opening has "really made a big change in the market. The big fear was that when the Comcast tower came on line, it was going to cause this great vacancy in the market. That hasn't happened, because most of the space has been backfilled by tenants who had grown or expanded over the last 24 months."

Vacancy in Philadelphia is doing better than the national average, with a 12.2% vacancy rate in offices overall. Class A buildings have a 11.7% rate while lower tiers have 12.4%. The report cites that some users are looking for cheaper space while the addition of the Comcast Center boosted class A vacancy.

"The city had 12 blocks of large space, more than 100,000 sf, 18 months ago," says Jarjisian. "There are only three of those left today. That tells you those are moving. A number of leases will expire in the next 24 months, unless something gets build. These tenants don't have too many options. They will probably just renew."

Jarjisian adds two factors to Philadelphia's success in the office market. "Philadelphia has become a good residential community that the Center City schools' students are opting to live and work in Philadelphia. Or, if they work in the suburbs, they still want to live in Center City. That's helped," says Jarjisian, who offers another explanation for Philly's luck. "Office tenants are coming in from outside of the city and they will continue to do that."