Philadelphia Market Report

Yield Range

8-9%

Vacancy Rate

19.5-22.5%

Active Deals

Outlook

Positive

Philadelphia CRE market shows resilience in Q1 2026: office stabilizing via conversions and flight to quality, industrial thriving with high leasing despite supply waves, retail at multi-decade low availability (highly competitive), multifamily absorbing supply with tight occupancy.TenantBase Q1 2026

Yields & Returns

Limited specific data; national trends suggest office 8-9%, industrial 4.8-6.7%, retail ~7%, multifamily ~5% (Q1 2025 proxies).Apartment Loan Store

Vacancy & Supply

Vacancy Rates

Office: regional 19.5-22.5% suburban/CBD impacted; Industrial: 11.2%; Retail: Center City 84% occupancy (~16% vacancy), available space multi-decade low; Multifamily: 95.6-96.7% occupancy (~3.3-4.4% vacancy).TenantBase Q1 2026, Cushman Industrial Q4 2025

Supply Pipeline

Industrial: 3.3M SF under construction (down); 11.7M SF delivered 2025; Multifamily: starts -36% YoY, 9.5k completions 2025; Office conversions reducing glut; Retail limited new supply.TenantBase, Cushman

Competitor Activity

Industrial: DrinkPAK 1.4M SF (Bellwether), Cirro Logistics 750k SF, Amazon 613k SF; Sales: 11601 Roosevelt Blvd $94.5M ($203/SF), 145-153 James Way $29.6M; Office conversions: 400 Market St, Six Penn Center.Cushman Industrial Q4 2025, TenantBase

Firm	Activity	Asset	Detail	Value
Various	Transaction	Commercial	Industrial: DrinkPAK 1.4M SF (Bellwether), Cirro Logistics 750k SF, Amazon 613k SF	N/A
Various	Transaction	Commercial	Sales: 11601 Roosevelt Blvd $94.5M ($203/SF), 145-153 James Way $29.6M	$94.5M
Various	Transaction	Commercial	Office conversions: 400 Market St, Six Penn Center.Cushman Industrial Q4 2025, TenantBase	N/A

Demand Drivers

3PL/manufacturing (industrial), education/health services (multifamily), expanding retail brands, flight to quality Class A office; major employers: healthcare (CHOP, Jefferson), education (UPenn, Temple), Comcast, Vanguard.TenantBase, Secret Philly

Rental Market

Multifamily: rents +2.2% YoY to $1,840, occupancy 95.6-96.7%; overall stabilizing/flat in 2026 as supply/demand balance; office $32/SF record high Class A.TenantBase

Employment & Economy

1.2% job growth 2025 (fastest among major metros); 1.9% YOY employment growth Q3 2025, unemployment 4.8%; healthcare/life sciences dominant (95% net private jobs), AI/tech upskilling; 250th anniversary boost expected.Secret Philly, Cushman Industrial

Migration & Demographics

Population rebound via immigration (+21k foreign-born 2023-24 vs -15k domestic out-migration); 16% foreign-born, stabilizing after pandemic losses; growth dependent on continued immigration.Northeast Times, Economy League

Transport & Connectivity

Strong logistics hub; SEPTA bus network redesign 2026+ for frequency/reliability; Schuylkill River Trail extensions; I-95 cap/Penn's Landing park; risks from potential SEPTA cuts impacting access/property values.TenantBase, SEPTA, Phila.gov

Key Risks

SEPTA service cuts risking $20B property value loss/$241M tax revenue; economic/political uncertainty; office hybrid work; potential immigration slowdown impacting population/labor; high interest rates limiting transactions.Econsult via WHYY, CBRE

Outlook 12–24 Months

Sustained stabilization/performance into 2026: office conversions aid recovery, industrial absorbs via leasing as pipeline shrinks/rents steady, multifamily rent growth to 3%, retail competitive; recovery phase end-2026 per CBRE; affordability edge vs NYC.TenantBase, CBRE

Sources

TenantBase Q1 2026 ↗Cushman Industrial Q4 2025 ↗CBRE Outlook ↗Secret Philly Economy ↗Economy League Immigration ↗