Changing building economy leaves a quarter of Philadelphia’s suburban offices empty

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With an incredibly high vacancy rate, office buildings in suburban Philadelphia are facing obsolescence as workers stay home.

With more than one million empty square feet in suburban Pennsylvania this year, about 25% of Pennsylvania’s huge suburban office market is unoccupied. 3 million square feet of space, or more than two Comcast Center towers, have stood empty since the start of 2020. As the post-COVID health of downtown Philadelphia office towers has captured attention, the state’s suburban office market stands out on a national scale because it is larger (and holds a much higher vacancy rate) than those in Salt Lake City, Kansas City, Charlotte, or Tampa.

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Suburban office markets may face more challenges in a post-pandemic recovery than urban areas. In the competitive job market, many buildings are outdated and unappealing to business executives and young workers looking for amenities. Between the flight to quality and the influx of demand from industrial hubs thanks to the supply chain crisis, the declining land value of office buildings in suburban Philly has made them attractive for redevelopment. Some companies, like Velocity Ventures Partners Firm (a company that traditionally reuses industrial buildings), are taking advantage of empty office complexes for redevelopment. For example, the nearly 250,000 square foot Nationwide office facility in Harleysville will be transformed by Velocity into a site for light manufacturing, distribution, product research and development, and then leased out to tenants.

As the work-from-home trend continues, suburban townships that have based their economy on office parks and white-collar workers will have to decide whether to rebuild office buildings into Class A workplaces or convert them. in residences or apartments, distribution centers, or industrial sites.

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