As of early 2023, Philadelphia is leading the Mid-Atlantic region in terms of industrial performance metrics, surpassing New York, Northern New Jersey, Washington D.C. and Boston. Philadelphia’s construction levels are now 400% above the three-year annual average before the pandemic. Driven by high market liquidity and e-commerce growth, industrial activity flourished throughout the country in recent years, particularly in areas near major ports, such as Philadelphia.
While fluctuating market conditions and increased construction expenses have led to a slowdown in financing and groundbreakings for some new projects, many that are already underway are continuing. Even though demand has softened, supply-side dynamics in early 2023 remain robust due to the delayed nature of real estate development.
The categories where Philadelphia has eclipsed other Mid-Atlantic markets include the most new industrial space added over the past 12 months, at 15.3 million square feet; the most new space under construction, at 27.7 million square feet; and the highest annual absorption volume, at 11.1 million square feet. Of the industrial property projects under construction in the Philadelphia region, approximately 25% have been pre-leased.
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