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Multiple Factors Add to Philly Office Strength

PHILADELPHIA-Report says Philly's educational and health services as well as the Comcast Center are helping to keep the city's office market afloat.

By Casey Freeman | Updated on August 14, 2008

PHILADELPHIA-The educational and health care sectors along with the opening Comcast Center have helped Philadelphia’s office market stay ahead of the rest of the country, according to Marcus & Millichap’s Office Research Report for the second quarter. The report also states rents will gain slightly as will office vacancy.

Average asking rates moved up 5% to $23.90 per sf while effective rents came up 4.1% to $20.31 per sf in the past 12 months according to the report. Last year asking and effective rents increased to 3.3% and 4.1% respectively. Class A rents increased 5.3% to $26.86 per sf, which the report says occurred because of more new space coming into the market. Class B and C rents rose 2.7% to $19.23 per sf. Last year similar rents came up 2.4%.

“In spite of the economy having difficulties, the office market seems to be strong in Philadelphia,” says CB Richard Ellis senior vice president David Jarjisian. “For sure rents have raised significantly in the past 12 months. What is causing it is a lack of space in University City.

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