Regional vacancy moves into the double-digits
Macroeconomic concerns, including unresolved trade agreements, high interest rates and softened consumer demand, have slowed tenant activity in the Philadelphia region. Year over year, the regional vacancy rate increased by 220 basis points (bps) to 10.3%, with all three submarkets experiencing higher vacancy compared to mid-year 2024. Southern New Jersey posted a 250-bps rise in vacancy from Q2 2024, reaching 12.5%. The highest vacancy was recorded in Salem County at 41.1%, followed by Burlington County at 11.2%. The Southern New Jersey market has been a hub of construction activity, with nearly 38.0 million square feet (msf) delivered since Q1 2020. However, these new deliveries are taking longer to lease.