Regional vacancy elevated due to new construction deliveries
The Philadelphia region’s overall vacancy rate increased 50 basis points (bps) quarter over quarter to 8.9%. Southeastern PA’s vacancy rate rose 30 bps to 7.8%, while Southern NJ’s vacancy increased 60 bps to 11.0%. However, the largest gain in vacancy was in the Northern DE submarket, where the rate rose 110 bps quarter over quarter to 7.6%.
Absorption has been positive for almost every quarter during the past five years; and when it was negative, it was barely so. Net absorption totaled 7.0 million square feet (msf) in 2024—a 10.3% increase compared with 2023. The Southern NJ submarket accounted for nearly 4.5 msf, or 64.0%, of the region’s annual occupancy gains. During the fourth quarter, Lecang occupied 845,280 square feet (sf) at 1900 River Road, while HYTX Logistics moved into 295,363 sf at 5206 U.S. Highway 130. Both properties are in the Burlington County submarket (Southern NJ).