More area offices go dark as firms cut jobs: report
It's as if One Liberty and the Independence Blue Cross tower shut down and sent everyone home.
"The Greater Philadelphia office market plunged" as tenants pulled out of a net 1.96 million square feet of office space in the three months ending today, more than double the Spring new-vacancy rate, business tenant rep GVA Smith Mack reports today. Total vacancies at 17.7%, from 15.9% in March, and 14.5% last year.
"More and more space has been vacated rather than leased, due to job losses and downsizing of companies," the firm wrote. "These stats trail what's happening in the market," founding partner Jeff Mack told me.
How much space went empty in July, August, September? Add up everything across the region, it's as if the Comcast and Cira towers sent everybody home. Or One Liberty and the Independence Blue Cross building.
Rents are down a modest 5 cents a square foot, to an average $22.47, if you believe "published reports." But "tenants are consolidating wherever they can, to cut square footage," Mack told me. "Deals are being done at even lower rates" as landlords "put more people in less space."
Center City vacancy rates rose to 13.1%, from 11.8%, during the quarter, including subleases. Downtown vacancies grew by 457,00 square feet, versus 617,000 the previous three months. Commonwealth Land Title, Right Management and Rohm and Haas were among the companies putting blocs of office space on the market.
It's worse in the suburbs, where Chester County's 150 Oaklands, Trinity Corporate Center and 1475 Phoenixville Pike reported big new vacancies. Horsham and Wilmington did better; Radnor finally plugged the holes left by Wyeth's departure for Collegeville a few years back by picking up VWR and Main Line Health (relocating and taking more space); King of Prussia and Plymouth Meeting did worse. South Jersey lost just as much rental space as Philadelphia.
SDI Health LLC's plan for a new 150,000 square foot headquarters in Plymouth Meeting "is the first new construction we've had in awhile." BPG Properties Ltd.'s new LEED-certified 1000 Continental Drive in King of Prussia is getting its $32 a square foot asking rate, with financials Nationwide, Hartford, Capital One and Rutherfoord, among others, but old space is dipping as low as "the mid-teens," Mack told me.