Philly and I-81/I-78 Tight Industrial Markets
Two greater Philly industrial markets are among the tightest in the nation, Cushman & Wakefield director Leah Balerno tells us, citing new data from the company: Philadelphia itself, with a vacancy rate of 4.7%, down 0.7 percentage points from a year ago; and the I-81/I-78 Corridor, at 5.2% percent, down 3.4 percentage points since last year—the seventh and eighth lowest rates, respectively. She sees the Pennsylvania market as "well poised" moving forward. Most landlords have held firm on pricing this cycle, which has allowed rental growth and market underwriting to justify the wave of new construction.
Landlords and developers are also building smarter, Leah explains. "We've seen an influx of e-commerce companies coming to Pennsylvania, often with requirements including a high number of parking spaces," she says. Some notions of maximizing coverage on a site aren't conducive to the needs of many of these kinds of tenants. Developers have taken note and are building with them in mind.
