With a staggeringly high vacancy rate, suburban Philadelphia office buildings face obsolescence as workers remain at home.
With over 1 million square feet in the Pennsylvania suburbs empty as of this year, about 25 percent of the enormous suburban office market in Pennsylvania is unoccupied. 3 million square feet of space, which is more than two Comcast Center towers, have been left empty since the beginning of 2020. While the post-COVID health of Philadelphia’s downtown office towers has received attention, the state’s suburban office market stands out on a national scale as it’s bigger (and holds a much higher vacancy rate) than those of Salt Lake City, Kansas City, Charlotte, or Tampa.
Suburban office markets may contend with more difficulties in a post-pandemic recovery than urban areas. In the competitive job market, many of the buildings are outdated and unattractive to corporate executives and younger workers looking for amenities. Between the flight-to-quality and the influx of demand of industrial centers thanks to the supply chain crisis, the property value drop for Philly’s suburban office buildings has made them attractive for redevelopment. Some companies, like Velocity Ventures Partners Firm (a company that traditionally repurposes industrial buildings), are taking advantage of empty office complexes for redevelopment. For instance, the nearly 250,000-square-foot Nationwide office facility in Harleysville will be transformed by Velocity into a site for light manufacturing, distribution, research, and product development, and will then be leased to tenants.
As the trend of working-from-home continues, suburban townships that based their economy on office parks and white-collar workers will have to decide whether or not to rebuild office buildings into Class A workplaces or convert them into residences or apartments, distribution hubs, or industrial locations.
