The Philadelphia area is "between 8-12 months behind the overall economic recovery," the local office of CB Richard Ellis says in a recent report. The nationwide broker also shows office vacancies in the Philadelphia region remain above 19%, highest since 1992.
Asking rents in the area dropped "for the ninth consecutive quarter" to $23.88 a square foot, from a peak of $24.58 in fall 2008. And "the difference between the landlords' asking price and the final taking price continues to widen."
Companies here are still looking "to consolidate or downsize" offices and new construction is stalled due to "lack of demand." There are no multi-tenant office buildings in the works anyplace around the city or suburbs, CBRE says.
Some who do need more space are finding bargains. Comcast has picked up additional space in three buildings outside its headquarters tower, and Farmers Insurance Group and Northwestern Mutual Life have expanded their suburban leases. There are also a few signs of life among retail stores and warehouse tenants.
But "it will take the Suburban Philadelphia submarkets five years to undo two years of vacancy caused by the recession." And it's worse in South Jersey.