The Philadelphia Commercial Real Estate Market

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Philadelphia, the City of Brotherly Love, stands proud as one of the nation’s most popular commercial real estate hubs for investment and leasing.

Pennsylvania’s largest metropolitan area serves as one of the oldest cities in the United States. The city has experienced a swell of development and repurposing projects in recent years, attracting investors and potential tenants alike. Crexi connects individuals seeking Philadelphia commercial real estate with thousands of properties and the tools they need to analyze and transact investments.

Philadelphia brokers and agents nationwide representing Philadelphia properties can harness Crexi’s platform and suite of sale and leasing tools to build their network and complete more deals. Crexi’s CRE tools have helped brokers facilitate more than $650 billion in commercial property transactions, representing over $5.5 trillion in listings.

Crexi is proud to serve Philadelphia, Bensalem, Levittown, Langhorne, Fairless Hills, and the surrounding communities as the area’s fastest-growing online CRE platform.

A downtown corner ice cream shop in Philadelphia.

The State of Philadelphia Commercial Real Estate 

Philadelphia, Pennsylvania, known for its rich history and vibrant culture, is where the hustle of city life meets the comfort of a small town. As the largest city in the state, it offers a unique blend of modernity and tradition. It’s the nation’s sixth-most populous city, with nearly 1.6 million residents. The cityscape is adorned with many trees, parks, and open spaces, offering a serene respite from a fast-paced lifestyle.

The economy of Philadelphia is diverse and robust, with steady job growth reported in recent years. It’s a place that fosters innovation and entrepreneurship, hosting various businesses across different sectors. 

Philadelphia has something for everyone, from iconic landmarks like the Liberty Bell and Independence Hall to a thriving culinary scene and vibrant nightlife. The city is also home to several top-tier educational institutions, making it an attractive destination for students and academics alike.

Investing in Philadelphia commercial real estate offers an attractive mix of opportunities. Its rich history, diverse economy, and the welcoming nature of its residents make it a stand-out choice among major American cities.

Looking down the street between several skyscrapers, pedestrians, and public transport in Philadelphia.

Philadelphia Regional Breakdown

While Philadelphia has seen periods of fluctuation, there’s an overarching narrative of resilience and potential. The city’s unique blend of historic charm and modern amenities continues to attract new residents and businesses, contributing to a steady upward trend in population growth. 

This growth shows its appeal as a place where people want to live, work, invest, and raise families. Even during periods of slower growth, the diverse and vibrant communities continue to thrive, offering a rich tapestry of cultural experiences and opportunities.

  • Philadelphia is home to nearly 1.6 million in the city and over 6.2 million in the metropolitan area.
  • The Greater Philadelphia Region comprises Bucks, Chester, Delaware, Montgomery, and Philadelphia counties.
  • Major urban areas include Reading, Upper Darby Township, Chester, Atlantic City, and Wilmington.
  • The combined population is projected to increase by nearly 12% by 2045.
  • The median age is 39.2, a little less than the figure for the state.
  • Per capita income is $47,170, about 10% higher than in Pennsylvania and the US.
  • Median household income is $84,123, about 20% higher than in the state and 10% higher than in the US.

Philadelphia Job Market

Philadelphia’s economy is a dynamic blend of traditional industries and emerging sectors, painting a picture of a city rooted in its history and forward-looking. 

The healthcare sector, hospitality, higher education, and manufacturing are the backbone of the city’s economy, while newer sectors, such as biotechnology and telecommunications, show promising growth. 

The city’s job market reflects this diversity, with opportunities spanning various skill levels and fields. Government initiatives are in place, focusing on inclusive growth that benefits communities across Philadelphia, making the market an attractive destination for entrepreneurs, job seekers, and investors alike.

  • The total GDP for the Philadelphia-Camden-Wilmington MSA is $518 billion, growing by more than 40% over the last ten years.
  • The unemployment rate is at a near all-time low of 3.6%, according to the US Bureau of Labor Statistics (October 2023).
  • Major industries in Greater Philadelphia include life sciences, financial services, technology, and manufacturing.
  • Philadelphia has been ranked as the #1 top finance and insurance cluster in the country, among the best cities for diversity in STEM, and one of the country’s top life science clusters.
  • Comcast, Campbell Soup, and Toll Brothers are among the many Fortune 500 companies in Philadelphia.
  • Major local employers include the University of Pennsylvania and Penn Medicine, Thomas Jefferson University and Jefferson Health, Children’s Hospital of Philadelphia, and The Giant Company.  
  • Philadelphia’s growth is marked by several significant real estate developments, including projects in Brewerytown, Grays Ferry, Ludlow, Port Richmond, and West Poplar under the Turn the Key construction initiative. 
  • Additionally, the redevelopment of 1801 Vine and 1901 Wood Streets promises to bring exciting new changes to the Benjamin Franklin Parkway area. 
  • Other notable developments are happening at The Navy Yard, Schuylkill Yards, Pennovation Works, and 2300 Market Street.
  • Temple University, the University of Pennsylvania, and Drexel University are the three largest colleges in the Philadelphia metro area.
  • Over 42% of residents hold a bachelor’s degree or a post-grad degree, a rate about 20% higher than in the state and in the US.
  • Transportation infrastructure includes major highways like Interstates 76 and 95, the Philadelphia International Airport (PHL), the bustling Port of Philadelphia, and an extensive public transit system encompassing buses, trains, subways, and trolleys managed by the Southeastern Pennsylvania Transportation Authority (SEPTA).
A yellow building in downtown Philadelphia.

Philadelphia Industrial Market

Asking rents in the Philadelphia industrial market are projected to reach historic highs. Although economic challenges impacting the global economy could slow the market’s exponential growth, tenant demand is expected to remain robust. With a highly trained labor force and a steadfast consumer base, the Philadelphia region continues establishing itself as a core industrial market on the East Coast.

Market overview (Cushman & Wakefield Q3 2023 Industrial Report

  • Inventory: 192,856,807 SF
  • Vacancy rate: 6.2%
  • Absorption:  3,400,000 SF (YTD)
  • Key leases by tenant: Performance Team (939,918 SF), Amazon (251,029 SF)
  • Deliveries: 11,363,660 (YTD)
  • Under construction:  12,749,275 SF 
  • Largest submarkets: Burlington County, Gloucester County, Philadelphia County, Lower Bucks County

Philadelphia Industrial Crexi Insights

These are the most recent lease and sales trends from Crexi Insights (as of December 2023):

For Lease (active)

  • Asking rate/SqFt (median): $12 per year
  • Median SqFt/listing: 12,500
  • Days on market: 232
  • Total listings on Crexi: 126 spaces

For Sale (active)

  • Median asking price: $1.85 million
  • Price/SqFt: $118
  • Asking cap rate: 7.6%
  • Days on market: 229
  • Total listings on Crexi: 71

Sales Comps (past 12 months)

  • Median sold price: $832,000
  • Sold price/SqFt: $90
  • Total sales volume: $256 million
  • Sold cap rate: 6.5%
  • Median SqFt sold/transaction: 9,074
  • Total SqFt sold: 2.63 million 
  • Days on market (median): 147

Find Philadelphia industrial space for rent.

Philadelphia Office Market

The Philadelphia office market is undergoing a correction, with signs of approaching peak vacancy. Many leases were signed under “new normal” conditions, indicating adjustments to hybrid work models. Despite lower overall leasing activity than pre-pandemic levels, there’s an uptick in higher-quality assets, suggesting companies are focused on talent acquisition and luring employees back to the office.

Market overview (CBRE Office Figures Report Q3 2023)

  • Inventory: 106,488,852 SF
  • Vacancy rate: 22.1%
  • Absorption:  -105,600 SF (current quarter)
  • Key leases by tenant: KPMG, Fox Rothschild LLP, Deluxe Corp., Praesum Health Allegheny, LLC 
  • Under construction: 600,000 SF
  • Largest submarkets: Market West Downtown, King of Prussia/Valley Forge, Market East Downtown

Philadelphia Office Crexi Insights

For an up-to-date analysis of the Philadelphia office market, turn to the data from Crexi Insights. It’s a reliable resource detailing the latest trends and movements in the city’s commercial real estate sectors, including recent sales and lease activities.

For Lease (active)

  • Asking rate/SqFt (median): $26 per year
  • Median SqFt/listing: 1,914 SF
  • Days on market: 240
  • Total listings on Crexi: 762 spaces

For Sale (active)

  • Median asking price: $1.35 million
  • Price/SqFt: $221 
  • Asking cap rate: 7.2%
  • Days on market: 190
  • Total listings on Crexi: 50

Sales Comps (past 12 months)

  • Median sold price: $750,000
  • Sold price/SqFt: $193
  • Total sales volume: $56.1 million
  • Sold cap rate: 6.5%
  • Median SqFt sold/transaction: 4,672 SF
  • Days on market (median): 221

Find Philadelphia office space for rent. 

Philadelphia Retail Market

Despite a recent slowdown in leasing activity, the Greater Philadelphia retail market remains robust, with the limited supply of quality assets dominating the narrative. With new construction low, the focus has shifted to existing assets, although many are located in less desirable areas or functionally less popular, like former malls. 

Landlords are becoming more open to repurposing these properties into industrial, medical, or revamped retail spaces. Prime shopping malls like King of Prussia Mall and Cherry Hill Mall continue to attract new retailers.

Market overview (CBRE Retail Figures Report Q3 2023

  • Inventory:  143,025,054 SF
  • Vacancy rate: 7.5%
  • Key leases by tenant: Dick’s Sporting Goods, Ross Dress for Less, Barnes & Noble Booksellers, Five Below
  • Under construction: 534,000 SF
  • Largest submarkets: Montgomeryville, Bensalem, Oxford Valley, Plymouth Meeting

Philadelphia Retail Crexi Insights

Lease and sales trends from Crexi Intelligence (as of December 2023):

For Lease (active)

  • Asking rate/SqFt (median): $25 per year
  • Median SqFt/listing: 2,815 SF
  • Days on market: 256
  • Total listings on Crexi: 863 spaces

For Sale (active)

  • Median asking price: $1 million
  • Price/SqFt: $247
  • Asking cap rate: 6.9%
  • Days on market: 161
  • Total listings on Crexi: 157 

Sales Comps (past 12 months)

  • Median sold price: $500,000
  • Sold price/SqFt: $134
  • Total sales volume: $203 million
  • Sold cap rate: 6.5%
  • Median SqFt sold/transaction: 2,986 SF
  • Days on market (median): 209

Find Philadelphia retail space for rent.

the bank of the Philadelphia river.

Philadelphia Multifamily Market

Rents have been rising in the Philadelphia multifamily market, but push-back from tenants on affordability is causing a reversion to rent growth more aligned with historical averages of 2-3%. Strengthened employment and high loan interest rates have boosted the demand for rental housing, leading first-time homebuyers to rent longer and boosting high occupancy rates. 

Investors remain optimistic due to long-term demographic trends and a significant undersupply of housing. A particular area of interest is adaptive reuse, as Philadelphia boasts one of the country’s highest percentages of converted buildings.

Market overview (CBRE Multifamily Report Spring 2023)

  • Total housing units: 2,634,290
  • Multi-unit inventory: 684,915 units
  • Vacancy rate: 5.6%
  • Average rent per unit: $1,682
  • Units under construction: 8,467
  • Largest new developments: 1001 S. Broad Street (1,100 units), 200 Spring Garden Street (752 units), 1099 Germantown Avenue (696 units)

Philadelphia Multifamily Crexi Insights

Here are the most recent multifamily Insights from Crexi (as of December 2023):

For Sale (active)

  • Median asking price: $950,000
  • Price/SqFt: $240
  • Price/Unit: $240,000
  • Asking cap rate: 6.5%
  • Days on market: 178
  • Total listings on Crexi: 211

Sales Comps (past 12 months)

  • Median sold price: $289,000
  • Sold price/SqFt: $183
  • Sold price/unit: $276,000
  • Total sales volume: $1.26 billion
  • Sold cap rate: 6.3%
  • Total SqFt sold: 8.44 million
  • Days on market (median): 191

Discover Philadelphia multifamily property for sale.

Learn more about the Philadelphia commercial real estate market with Crexi Intelligence.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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