In 2019, rent growth in the metro area was above-average and leading the way was the City of Philadelphia. Annual rent growth in the City of Philadelphia continues to outperform the five-year average. Meanwhile, the development pipeline in the city is starting to diversify away from Center City into North and West Philadelphia. We expect the pipeline diversification to continue for years to come. All suburban submarkets experienced positive rent growth in 2019, with Bucks, Camden, and Burlington counties surpassing their five-year averages.

fourth QUARTER 2019 HIGHLIGHTS

The metro area Class A stabilized vacancy rate remains unchanged from a year ago at 4.9% at fourth quarter 2019. Suburban submarkets experienced an increase in vacancy by 20 basis points.

• Stabilized vacancy in Southern New Jersey decreased by 120 basis points over the year to 4.1%.

• Suburban Pennsylvania stabilized vacancy increased by 70 basis points from December 2018 to 5.4%.

• Stabilized vacancy decreased by 20 basis points in the City of Philadelphia to 4.7%.

The City of Philadelphia lead in rent increases followed by Southern New Jersey over the year. Here are the effective rent changes by sub-area for 2019:

Southern New Jersey up 3.0%

Suburban Pennsylvania up 2.5%

City of Philadelphia up 4.0%

Metro-wide, effective rents rose 3.2% in 2019. Average metro-wide effective rents at fourth quarter 2019 are $1,957, or $2.12 per SF. Effective rents average $2,283 ($2.69 per SF) for high-rise product in the City of Philadelphia and $1,759 ($1.78 per SF) for low- and mid-rise product in the suburbs.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

William Rich, CRE: 202.778.3121 Brendan Pierce: 202.778.3123
PresidentSenior Associate

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