Real estate: Drug, bank revival in the burbs

Newmark Grubb Knight Frank's year-end Philadelphia Area Trends report -- higlights from Joseph Gibson, research manager:

- Center City: "Trophy assets continue to enjoy rent appreciation," rebouding to $37.05 "Full Service Gross," from the recent low of $33.01 in 2010. "Vacancy rates... below the 5% mark" for the high-end Liberty Place-Verizon-Mellon-Comcast skyscraper district. The GlaxoSmithKline consolidation punched a hole in the market; otherwise demand was "flat to somewhat higher."

- Suburban Pa.: "2012 marked the first year since before the last recession that the pharmaceutical sector added to occupancy." Shire's Atwater deal adds 200,000 sq ft+. Overall rents face 'only modest gains at best" in the Turnpike and 202 corridors, with better news in high-end Radnor and Conshohocken.

- South Jersey: Mortgage lending and other financial services, which shut down and moved out after the 2008 crash, reversed and expanded modestly (regaining 10% of past losses). Defense cuts could still hurt Mount Laurel/Moorestown.

- Wilmington: "Capital One's move into (the former Wilmington Trust) building at 1100 N. Market punctuated a year of healthy demand growth" after years of bank mergers and shutdowns. "Expect upward pressure on rents by late 2013." 

Continue Reading