Philly's Office Construction Boom Could Mean Absorption Problems Soon

Philadelphia is in a building boom on a level that hasn't been seen in decades, but serious questions are beginning to arise about its ability to absorb all of it.

According to research from JLL, at least 1.4M SF of new construction is set to deliver by 2020, and at least 600k of that is not pre-leased. That includes under-construction buildings like Aramark's new HQ at 2400 Market St, 3675 Market and One Franklin Tower, which have about 600k SF still available between them.

Among large office buildings that were delivered in 2016 — FMC Tower, 1100 Ludlow and 1200 Intrepid in the Navy Yard — 240k SF remains available.

With that much space available already, and so much more on the way, absorption rates stand to fall from their currently strong levels, unless a major, out-of-market tenant comes to Philadelphia.

Of course, all of this uncertainty hasn't even factored in Schuylkill Yards, the massive University City project that will deliver millions of square feet over a period of time starting in 2020.

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