Availability climbs higher with sublease additions, optimism grows for office return later in the year

The new year began with many organizations still operating remotely, but there is cautious optimism that employees will be able to return to the office in the second half of the year. Pharmaceutical companies have sped up production of the three approved vaccines and the United States government has made it a goal to have vaccination open to all adults by May. However, Philadelphia’s office market softened further in Q1 and will likely continue to do so short-term. Overall availability climbed 130 basis points (bps) from the fourth quarter to 20.1%. Regional sublease availability ticked up 20 bps to 3.0%, while Central Business District (CBD) sublease availability increased 30 basis points to 1.9%. Some notable blocks of sublease space include 255,000 square feet (sf) at 8800 Tinicum Boulevard in the Outer Philadelphia County submarket and 54,869 sf at The Graham Building in the West Market submarket. Overall availability in the Philadelphia Central Business District (CBD) increased 130 basis points to 15.0%, with the West Market submarket recording a 16.8% availability rate.

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