Office leasing vacancy rate drops in 3rd quarter

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screen-shot-2016-10-10-at-8-51-57-pmNewmark Grubb Knight Frank (NGKF) reported that the northern Delaware office market posted a strong performance in the third quarter of 2016.

Northern Delaware experienced a fifth straight quarter of demand growth, tallying nearly 88,000 square feet in absorption, NGKF reported.

The vacancy rate dropped  190 basis points from third-quarter 2015 to 16.6 percent this quarter. Rents rose 12 cents per square foot quarter-over-quarter to $24.64 per square foot.

The third quarter also saw  notable property trades in New Castle County, adding to the year-to-date sales volume of $163 million, the real estate firm reported.

NGKF Senior Managing Director Neal Dangello noted, “Sales like the 144,000-square-foot, two-building Chapman Road portfolio, which sold for $15.55 million, indicate that investor interest in strong, well-tenanted office assets in the region is alive and well.”

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In other highlights

  • Southern New Jersey’s submarkets all gained new tenancy, totaling approximately 51,000 square feet for the region, which pushed overall vacancy down 30 basis points to 17.0 percent.
  • In the Philadelphia Central Business District. In the third quarter. 230,010 square feet was leased to new tenants,, cutting the vacancy rate by 60 basis points quarter-over-quarter to 11.9 percent.
  • Suburban Philadelphia saw  201,566 square feet in positive absorption. The vacancy rate decreased 30 basis points from the second quarter to 15.9 percent   Two build-to-suits broke ground this quarter: One of these commenced in the Southern 202 submarket for The Franklin Mint; the other was in the King of Prussia submarket.

NGKF’s 12,800 professionals operate from more than 370 offices in established and emerging property markets on six continents. NGKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets.

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