The Philadelphia metro area’s stabilized Class A* vacancy rate stands at only 2.3% – 40 basis points higher than the 1.9% rate registered at this time last year. Vacancy increased over the year in the suburbs of both Pennsylvania and New Jersey, and Center City vacancy has also increased slightly from last year at this time.
Suburban Pennsylvania vacancy is up 50 basis points compared to June 2011, at 2.4%. Vacancy in Southern New Jersey, at 3.3%, rose by 110 basis points from 2.2% at the end of second quarter 2011. Vacancy in Center City is up 10 basis points to 1.6%.
The substate areas of Southern New Jersey and Suburban Pennsylvania experienced mixed rent conditions, showing overall rent change in the suburbs of 0.2% over the year with average effective rents at $1,414. Rents in Center City performed the worst overall, with a decrease of 1.0% since last year at this time.
Rent change in Suburban Pennsylvania was nearly flat at negative 0.1% since second quarter 2011, and Southern New Jersey increased by 0.9% over the same period. Effective rents across the entire Philadelphia metro are essentially flat at negative 0.1% over the past year.
For the metro as a whole: Average effective rental rates are $1,606. Center City effective rents average $2,179 ($2.17 per SF) vs. $1,414 ($1.40 per SF) in the suburbs.
*Class A units are defined as luxury units that are usually less than ten years old, are generally located in highly desirable geographic areas, and can garner high rents.
