Industrial vacancy rises despite tight Philly market

A new report from Newmark Knight Frank states that the third-quarter of 2017 for the Greater Philadelphia region and the I-81/78 Corridor industrial markets ended with almost two million square feet in positive absorption. So while vacancy rose 30 bps to 6.9 percent compared to Q2, the market, especially in the Southern Pennsylvania region, remains extremely tight. The Southern New Jersey market recorded 1.5 million square feet in positive absorption, most of which was thanks to 1.1 million sqf which was attributed to a new Amazon facility. Still, vacancy in the Southern New Jersey warehouse/distribution market increased for the first time since fourth-quarter 2016, rising 70 basis points to end at 3.8 percent. The rise in vacancy is mainly attributed to 302,400 square feet of space vacated at 200 Arlington Boulevard. The rate remains among the lowest in recent years, according to Kurt Montagano, senior managing director at NKF. “While vacancy for warehouse buildings rose slightly, rents rose as well," he said. "The warehouse and distribution market in Southern New Jersey remains very active.”