This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Newmark Grubb Knight Frank Unveils 2013 Commercial Real Estate Forecast For Center City Philadelphia

PHILADELPHIA, Jan. 7, 2013 /PRNewswire/ --  Newmark Grubb Knight Frank (NGKF), one of the world's leading commercial real estate advisory firms, today presented its 2013 forecast for the commercial real estate market in Center City Philadelphia. Based on the company's proprietary research, Center City market fundamentals will remain relatively flat over the next 12 months, with the exception of investment sales volume, which is expected to increase, and rental rate appreciation in trophy assets. The 2013 forecast was presented at the firm's annual forecast breakfast, which featured keynote speaker Howard Lutnick, chairman and chief executive officer, BGC Partners, Inc. and Cantor Fitzgerald, L.P., as well as a number of NGKF market specialists.

(Logo: )

" Philadelphia's solid market fundamentals and business diversity remain the key drivers behind commercial real estate activity in this region," said Robert Clements, executive vice president and managing director of NGKF's Philadelphia region, which includes offices downtown as well as in Wayne, Pa., Marlton, N.J., and Wilmington, Del. "We expect a modest uptick in office leasing as the market continues to improve, with a return to robust growth delayed until the labor market recovers in earnest and corporate users feel more comfortable planning for expansion. The investment market holds more promise, as local and out-of-town investors evaluate opportunities in the nation's fifth largest metro. This should lead to additional sales activity in 2013, both in the CBD and beyond."

In 2012, office leasing volume totaled approximately 2.8 million square feet, a 40% increase over 2011, driven by a handful of large renewals and new lease transactions. The office leasing market is forecasted to post a net absorption of 150,000 square feet by the end of 2013. Vacancy, which ended 2012 at approximately 14.1% overall, is projected to drop to 13.75% by the end of 2013, faring better than the national rate of 15.2%. Despite this modest improvement, rental rates will remain flat, with the exception of Philadelphia's trophy assets, where direct vacancy is a very healthy 5.1% and rents commanded $37.05 per square foot full service gross at the end of 2012.

"Although Center City vacancy is currently higher than in other metros in the northeast corridor, Philadelphia is holding its own when compared with major markets throughout the country," said Sid Smith, executive managing director. "Additionally, the CBD continues to outperform the region's suburban office markets."

Office vacancy in both Suburban Pennsylvania and Southern New Jersey ended the year at over 18%, while Wilmington, Del., posted vacancy of 17.3%. By contrast, in the core CBD, the strong education and health services sectors are a major driver of office demand, especially in the University City submarket, where the trend of these institutions taking major blocks of space remains intact.

Wayne Fisher, executive managing director, said, "A focus on improved space utilization continues to temper a robust rebound in the leasing market as tenants wring out excess capacity. There are still opportunities to move from Class B to Class A buildings, and we expect that in the year ahead, tenants will continue to seek out better space and place increasing emphasis on sustainable, efficient real estate."

New construction in Center City Philadelphia has remained in check, with only two projects totaling 369,000 square feet currently under development, both in the University City submarket. The 97,000-square-foot 2.0 University Place, which is the first LEED Platinum Pre-Certified building in Philadelphia and one of only a few throughout the country, is the sole project to be delivered in 2013.

In 2012, Center City experienced four significant investment transactions. Two of the properties, 1616 Walnut and 260 S. Broad, are being converted to residential use by their new owners, which is continuing to change the face of downtown.

"The investment market has seen more than 6 million square feet of office properties sold for conversion in the last 15 years," said Michael Margolis, senior managing director. "We expect to see more of this type of activity, as residential densities continue to increase in Center City."

Overall, Philadelphia, like all major cities, is affected by national economic trends. Mr. Fisher cautioned that low GDP growth and subpar job creation may slow rent growth and increases in property values through the first part of the year.

For more information about NGKF's outlook for the Center City Philadelphia commercial real estate market, contact Mira Matic at 973.461.9005.

About Newmark Grubb Knight Frank

Newmark Grubb Knight Frank is one of the world's leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents.

Newmark Grubb Knight Frank's integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit

Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit

Press Contact: Mira MaticPerformance Public Relations973-461-9005

SOURCE Newmark Grubb Knight Frank

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%
TSLA $151.04 0.00%
YHOO $27.04 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs