Vacancy rises as the economy weakens and consumer spending slows
Vacancy increased 60 basis points (bps) from year-end 2022 to 4.2%. Warehouse/distribution properties are taking longer to lease with retailers and e-commerce firms slowing expansion in response to weakened consumer spending and higher interest rates. The largest increase in vacancy was recorded in the Central PA submarket, which rose 140 bps quarter over quarter, to 3.1%. Northeast PA’s vacancy rate increased only 10 bps to 6.2%. The Lehigh Valley submarket was the only one of the three submarkets to post a decrease in vacancy, a decline of 20 bps from the fourth quarter of 2022 to 4.7%.