'More Resilient Than Many Folks Predicted': A Countdown Of 2024's 9 Biggest New Philly Office Leases
There’s been a lot of handwringing about the Philadelphia office market in 2024, but JLL data provided exclusively to Bisnow shows there was still demand for new leases this year, particularly in the skyscrapers that tower over Center City West.
Five of the largest leases overall were renewals, JLL Senior Analyst Emily Friedman said. With those taken out of the equation, the nine largest leases inked in the city ranged from 17K SF to 60K SF.
“The leasing market in Philadelphia is definitely proving to be more resilient than many folks predicted,” Friedman said of the city’s office sector.
“While we are still seeing an average downsize rate of about 21%, many large occupiers are still finding value in having a downtown office — particularly within higher-class buildings to drive employee attraction and retention.”
The analyst expects the thawing capital market to boost redevelopment in Philly, which she believes will keep vacancy rates in the city’s office market from rising too much more.
“While there is still potential for added vacancy based on the expected roll in the next five years, it shouldn't be more than 100 to 200 basis points from the current figures due to redevelopment activities,” Friedman said.
Here is a countdown, from smallest to largest, of this year's biggest Philly office deals:
9. Teachers Insurance and Annuity Association of America
This Fortune 100 company focused on retirement funds for academics, researchers and government workers signed a 17K SF lease at 1700 Market St. in Q2.
The skyscraper, built in 1968, is owned by Shorenstein Properties. It's just two blocks from City Hall, and includes amenities like a tenant fitness center and an outdoor lounge, according to a brochure posted on JLL’s website.
8. City Of Philadelphia
Philadelphia City Hall is apparently tight on space, even when anti-arena protesters aren’t packed into the council chambers.
After Mayor Cherelle Parker made waves this summer with her return-to-office mandate for municipal workers, the city signed a 21K SF sublease at 1 Penn Square West in Q4. The 25-story building owned by an affiliate of Method Co. is right across the street from City Hall.
7. Digitas
The marketing firm Digitas grew its presence in Philly earlier this quarter with a 23K SF expansion at 100 South Independence Mall West. It’s one of just two leases east of Broad Street on this list.
The Macquarie Group, an Australian financial services company, is one of the main tenants at the structure, which Keystone Development + Investment has owned since 2013.
6. Marsh McLennan
This insurance company relocated its Philadelphia offices to 31K SF at 30 South 17th St. in Q1. The pristine-looking 20-floor structure owned by Oaktree Capital Management was built in 1975, according to the Council on Tall Buildings and Urban Habitat.
5. BDP International
This freight and transportation logistics giant was the other company on this list interested in Center City East. It relocated to a 31K SF space in the historic office complex at 510-530 Walnut St. in Q2.
The three towers around Washington Square owned by Keystone Development + Investment were built in 1914, 1930 and 1972, according to the Old City District.
4. HNTB Corp.
It makes sense that an engineering firm would want to be located in a gleaming skyscraper.
HNTB moved to a 31K SF space in the PNC Bank Building at 1600 Market St. in Q2. The structure American Real Estate Partners-owned building was completed in 1983, according to the Council on Tall Buildings.
3. Penn Presbyterian Medical Center
There’s only one entry on this list west of the Schuylkill River. Penn Presbyterian Medical Center inked a 39K SF lease at 3750 Market St. earlier this quarter.
The University City building, owned by the National Board of Medical Examiners, is located right across from the hospital’s hefty complex on the west side of 38th Street.
2. Dilworth Paxson LLP
The corner of 17th and Market streets is the beating heart of Philadelphia’s real estate industry.
It makes sense that Dilworth Paxson LLP, a law firm focused on those companies, would want to be located there, as well. In Q1, it relocated to a 46K SF space at 1650 Market St., which is owned by Metropolis Investment Holdings.
1. Saul Ewing Arnstein & Lehr
Philadelphia’s largest office lease of 2024 was Saul Ewing’s Q1 move into a 60K SF space at 1735 Market St.
The wide-ranging law firm has had a presence in Philly since 1921, according to the company’s website. The BNY Mellon Center’s completion date of 1990 makes it one of the newest structures on this list. The building is owned by Silverstein Properties and Arden Group.
