COVID-19 crisis likely to upend a strong quarter for activity in the Philadelphia market

In March, the COVID-19 pandemic spread brought Philadelphia business to an unprecedented halt. No one can know the near-or long-term impact that a crisis of this scale will have on the office market; however, we can look to trends immediately prior and the strength of the region’s underlying fundamentals for assumptions of what could occur once the crisis has passed. Ahead of current events, Philadelphia reported 2.7 million square feet (msf) of leasing activity for the first quarter — 36.0% more than recorded in the fourth quarter of 2019. Notable transactions executed during the quarter included: Axalta Coating System’s renewal of 75,115 square feet (sf) in the Kennett Square/Concordville submarket, the City of Philadelphia’s renewal of 66,631 sf in the West Market submarket and Paypal’s lease of 60,593 sf at Metroplex One in Plymouth Meeting. The pace of demand is sure to slow in coming quarters as organizations reevaluate steps forward once activity can resume.

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