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LEASING DIPS
After a strong fourth quarter of leasing, deal volume in the first quarter fell back to the five-year quarterly average of 2.0 million square feet (msf). This correction saw a 15.8% dip from the previous quarter of 2.4 msf. Tenants have leased 8.9 msf in the last four quarters, nearly 10% above the longterm average of 8.1 msf leased per year.
AVAILABILITY INCREASES
The market’s overall availability rate increased by 170 basis points from 17.6% to 19.3%. The Class A availability rate increased by 110 basis points to 17%.
INCREASE IN CLASS A RENT
Overall asking rent in the region fell by 0.9% to $28.46. Class A asking rent in the region rose by 1.2% to $30.43. Downtown Philadelphia registered a 4.2% increase in overall asking rent, moving from $31.07 to $32.36 to start the year. Downtown Class A rent posted a bigger 5.5% jump, rising from $32.02 to $33.79.
“Large companies continue to seek more efficiency in their space, which is pushing up availability rates. Demand for quality space remains strong, though, with leasing activity above average and rents in the CBD at an alltime high."
Morgan Langley, Research Analyst