Modest rent growth across the metro area was driven primarily by asking rate increases in downtown and the suburbs, with the latter posting a $0.43 uptick, quarter-over-quarter. Additionally, Class A rates grew in the CBD, where the lack of available space in trophy assets continued to put upward pressure on rents.

"Tenants in the Philadelphia region continue to invest in their office space as a tool to recruit and retain the best talent in today's competitive labor market," Les Haggett, first VP, CBRE. "This dynamic has fueled a competitive real estate environment, with companies starting the search for office space much sooner as desirable options are limited. This continues to push rental rates to new historical highs and drive the need for new office development to meet the demand for today's new workplace."

Recently, the real estate market in Philadelphia has seen the emergence of the e-sports industry in the city. In September, a partnership of Comcast Spectacor and the Cordish Cos. broke ground on a 3,500-seat e-sports arena in South Philadelphia, which will house the Philadelphia Fusion, among other related events.

CBRE adds that multiple e-sports tenants are in the market for office and event space in Downtown Philadelphia. Interest from these unique users for space downtown could increase landlords' openness for more creative buildouts capable of housing the types of events e-sports tenants need, the report states.

On the capital markets front, the most notable investor sale of the third quarter was Rubenstein Partners' acquisition of Chesterbrook Corporate Center for approximately $134-per-square-foot.

Overall, the Philadelphia office market showed signs of healthy interest from investors as sales volumes persisted near recent historical highs, CBRE states in the report.