Vacancy within the Metro Philadelphia market decreased 30 basis points (bps) to 4.8%, an all-time-low. Vacancy should moderate near this level in coming quarters as developers increase activity to meet demand.
Lease rates increased in Q1 2019 to $7.53 from $5.72 in Q4 2018 as a result of new flex asking rates of $31.00 at the Discovery Labs campus in King of Prussia, PA. Regardless of this, rents across nearly all geographies and product types grew this quarter as a result of limited supply.
Construction starts in Q1 2019 totaled nearly 900,000 sq. ft. of space all originating from Southern NJ. More than 5.5 million sq. ft. of industrial space was under construction at quarter’s end.
More than $315 million of investment sales occurred in the Metro Philadelphia market in Q1 2019. Institutional investors made 54% of the buying pool and REIT and private investors made up the rest.