Sunday, May 3, 2015

Center City office rents sag

"Incredible concessions"

Center City office rents sag

For much of its history, Philadelphia's financial district was centered within a couple blocks of Walnut Street, well east of Broad. Small to midsized financial and professional employers are still down there.

It's a funky old-Philly vibe over there, in the brick-and-stone city, with the flowering trees, the fancy restaurants and homes and historic markers. Not like those concrete-and-glass towers along Market west of Broad, where hard-working people drive into the parking garages or hoist themselves up from Suburban Station each morning, eat at their terminals, rush back to the burbs at night, and might as well be working in Atlanta.

But the rising vacancies in the tower district are driving hungry brokers to troll for tenants across town. "Uptown pricing has met what landlords charge in the historical area," as the head of one of our rare growing firms told me this morning. "All the prices are in the low $20s (per square foot). But they're adding incredible concessions."

Brokers are laying multi-thousand-dollar bills on his desk to fill their yawning space; any solvent tenant with a lease coming due "is red hot right now."

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Joseph N. DiStefano
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