CBRE - Philadelphia Retail: Stepping Out of the Secondary Market Shadow

7/14/17

1st American World Heritage City. #1 City for Millennials. Top 10 Food Cities. Rate of Philly Job Growth Outpacing that of New York City. #4 American Metro for New Retail Entrants.¹

The recent rankings and headlines don’t lie: Greater Philadelphia has been steadily building a considerable new allure for residents, tourists, and workers, and increasingly, for the retailers that serve them. After adding a modest, but rising, number of new retailers over the past few years, the region made a splash in 2016 by welcoming 12 retailers new to the market, a record number of which landed Philadelphia a ranking in the top 5 metros nationally for new retail entrants, beating out San Francisco to attain the #4 spot. Among the global and national retailers fresh to the market were Italian furniture company Natuzzi Italia, German cosmetics shop Kneipp, luxury brands Diane von Furstenberg, Jimmy Choo and MCM, and mid-range fashion retailers such as Rag & Bone, COS, Superdry and Under Armour Brand House.

Within Greater Philadelphia, two main hotspots have worked in concert to bring greater retailer attention to the region: Philadelphia’s Center City and King of Prussia. Because of its growing dynamism as a place to live, work, and play, Center City has become not just an attractive place for retailers to plant a first flag in the greater region, but also a popular test market for new retail concepts, such as Warby Parker, and urban formats for Target and A.C. Moore, as well as a target site for flagship stores, which Old Navy, Verizon and Whole Foods opened in 2016.

King of Prussia, a suburb of Philadelphia, is anchored by its renowned mall, which not only is the biggest mall in the country by retail sq. ft. but is also demonstrably attuned to shifting consumer preferences and, thus, keeps evolving and expanding. In 2016, as some other area malls declined or shuttered, the King of Prussia Mall completed a 155,000 sq. ft. expansion to house 50 new tenants, half of which are mid-range to luxury brands, and to deliver superior shopping experience. The success of these two areas in attracting both established and new-to-market retail tenants has elevated the reputation of the entire Greater Philadelphia market. 

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