Philly’s Small-Bay Industrial Market Stays Strong

Philly’s Small-Bay Industrial Market Stays Strong

Philadelphia’s industrial market showed resilience in early 2025, sustaining strong tenant demand despite a national leasing slowdown. Vacancy rates rose with new inventory, but net absorption increased year-over-year. Burlington, New Castle, and Bucks counties continued driving leasing momentum, while industrial properties remained the region’s top investment choice for the fourth consecutive year.

Leasing activity has been steady for spaces under 300,000 square feet, but larger buildings have struggled. A broker noted strong demand for small-bay facilities under 100,000 square feet, with frequent site tours, while larger “home run” buildings saw limited traction. CoStar data shows only eight leases over 300,000 square feet were signed in the past year, compared to nearly 700 leases under 100,000 square feet.

*Article courtesy of Costar

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