Dec 13, 2021 - Real Estate

Demand for office space in Philly lags other large metros

Taylor Allen

Illustration of a fading silhouette of a suited person on an office chair — Illustration: Annelise Capossela/Axios

Philadelphia's office space industry is recovering from pandemic-driven shutdowns and shifts in work more slowly than other large metros, according to a new CBRE report.

Why it matters: Many employees are still working from home, and it's one of the main drivers behind empty downtowns in the Philly metro and across the country.

State of play: Demand for office space in Philly lags behind almost all of the top 12 U.S. office markets, compared to pre-pandemic levels.

Only San Francisco saw slower recovery, according to the commercial real estate firm.
Philadelphia's leasing activity modestly improved in October but still fell below 75% of its pre-pandemic baseline.

Between the lines: The city also has seen a slight decrease in sublease availability, a positive sign.

But Philadelphia is still struggling "to reduce the record-high level of sublease space seen in September," the report states.

Of note: The report, published in October, bases its ranking on space requirements of active tenants in the market, leasing activity and sublease availability.

What they're saying: "Barring another COVID resurgence, the office market appears on increasingly firmer footing heading into 2022," the CBRE report says.

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Demand for office space in Philly lags other large metros

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