PHILADELPHIA-Industrial property vacancy rose in the last part of 2012 in the area, according to the latest report from the real estate information company Costar. The vacancy rate was 9.1% at the end of the fourth quarter.
Although there was positive absorption of 1.4 million square feet in Q4 – compared to 549,201 square feet in the third quarter - the overall vacancy rate for industrial property increased. Vacant sublease space increased in the quarter, ending the year at 2.7 million square feet.
The trend runs counter to that of national industrial market. The vacancy rate decreased to 8.8% from the previous quarter for the U.S., with positive net absorption of 70.41 million square feet.
However, the Philadelphia results are in line with trends with the northern part of New Jersey, according to a report this week from Cushman & Wakefield.
In northern New Jersey, there was a total 7 million square feet leased in Q4, but C&W said activity for the year was “modest.” The central part of the state saw 10.6 million square feet of leasing activity in 2012, the bulk of it in the first half of the year.
The year-end industrial vacancy rate was 10.1% in northern NJ and 9.1% in the central region.
Last year, Costar listed the largest lease deals in the Philadelphia market as: Cardone Industries Inc., taking 1,455,000 square feet at 5400 Langdon St; Westport Axle's move to occupy 516,800 square feet at 650 Boulder Dr,; and Ulta Inc.'s lease of 361,900 square feet at the I-81 Distribution Center.
The average rental rate was $4.48 per square foot at year's end, an increase over the previous quarter.
That compares with national average rental rate of $5.18 per square foot. Average asking rent across the north/central Jersey region rose 2.1% year-over-year, to $5.78 per square foot at year-end.
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