Q4 2022 Industrial Real Estate Report: Philadelphia, PA
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Philadelphia is renowned for its rich history and culture. Its iconic landmarks include the Liberty Bell, Independence Hall, and the Philadelphia Museum of Art. Its most active industries are healthcare, education, and finance.
Unemployment in Philadelphia declined from 4.9% in Q3 to 4.5% in Q4.
The metro area population increased by 0.38% from 2021 to 2022. In Q4 2022, Philadelphia’s industrial real estate market saw rising rents, declining absorption, and decreasing vacancies.
General Area Overview & Demographics
The estimated population of Philadelphia was around 1.58 million people. African Americans comprise 44% of the population, Whites comprise 34% of the population, and Hispanic or Latino people represent 14%. Other ethnic groups, such as Asian Americans and people of mixed races, comprise the remaining 8% of the population.
Philadelphia Median Household Income & Population
Household income in Philadelphia is around $46,000, which is lower than the national average. The income gap is significant, with a considerable portion of the population living below the poverty line.
The median age is 34.7 years, with a relatively younger population compared to the national median age of 38.2 years. Millennials and Generation Z make up a significant portion of the people.
Philadelphia is known for higher education institutions like the University of Pennsylvania, Temple University, Drexel University, and many more. The city has a high concentration of college graduates, making it a hub for innovation and technology.
Some of the major attractions include the Liberty Bell, Independence Hall, and the Philadelphia Museum of Art, which features a collection of over 240,000 works of art. The city is also known for its delicious food, with iconic dishes such as Philly cheesesteak and soft pretzels.
The city has a humid subtropical climate, with hot summers and cold winters. The average temperature in July, the hottest month of the year, is around 86°F, while the average temperature in January, the coldest month, is around 26°F.
Summary of Philadelphia Industrial Real Estate Performance in Q4 2022
Overall vacancy for Philadelphia’s industrial real estate in Q4 2022 was 3%, a decrease from Q3’s 3.2%.
Suburban Philadelphia and Philadelphia County both had high vacancies at of 3.4%.
The lowest vacancy rate was in New Castle County at 1.3%.
Net absorption was over 3 million square feet in the fourth quarter, a decline from the third quarter’s 6 million square feet of positive absorption.
At the close of 2022, industrial absorption in Philadelphia reached 16.7 million for the year.
What are industrial space rents like in Philadelphia?
Philadelphia’s industrial real estate rents were $10.13 per square foot in Q4 2022, an increase from Q3’s $9.37.
New Castle County had the highest asking rate at $11.45, while Suburban Philadelphia had the lowest at $8.91.
Purchase & Leasing Activity
The average sales price for industrial real estate in Philadelphia was $99.40 per square foot, while sales volume settled at around $3.5 billion, a 40% year-over-year decrease from 2021.
Leasing remains strong: New leases comprised most of Philadelphia’s leasing activity.
Notable Industrial Real Estate Deals in Philadelphia in Q4 2022
There were several notable deals that took place for Philadelphia’s industrial real estate in Q4 2022:
- Velocity Venture Partners purchased 468,000 square feet for $41.8 million.
- Link Logistics purchased 453,000 square feet for $91 million.
- Cart.com leased 800,000 square feet.
- ID Logistics leased 527,000 square feet.
These are select examples among other activity.
New Industrial Real Estate Development Activity in Philadelphia in Q4 2022
Q4 2022 saw 2.96 million square feet of new supply for industrial real estate in Philadelphia, a decline from nearly 6 million in the third quarter.
Around 14 million square feet of industrial deliveries entered Philadelphia in 2022. Both Southern New Jersey and the Lehigh Valley accounted for 5.5 million each.
At the close of Q4 2022, 26.5 million square feet of new industrial product were in the construction pipeline, and Southern New Jersey will receive half of that.
Takeaways for Industrial Real Estate Investors
Philadelphia’s industrial real estate market saw mixed performance with both positives and negatives in Q4 2022.
While rents are steadily rising and vacancies are decreasing, absorption is slowing down.
Investors should consider keeping an eye on how new supply in 2023 performs.
Stay diligent, do your research, and happy investing.
Find & Connect With Commercial Agents & Brokers in Philadelphia for Free on MyEListing.com
MyEListing.com maintains one of the largest national databases of commercial agents & brokers. Use it for free to find a commercial agent or broker in Philadelphia.
Other recent articles
Article Search
Share
All Article Categories
