Philadelphia Commercial Office Space for Rent

Q3 2026

Q3 2026 Philadelphia Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Greater Philadelphia office leasing has already reached 3.7 million SF in 2026, more than any full year from 2020 to 2024, led by major commitments from Burlington and Chubb. Industrial absorbed 1.5 million SF in Q3, and Center City retail occupancy hit a two-year high. Tenant demand on TenantBase shifted toward office in Q3: office space accounted for 45.6% of all Philadelphia tenant searches, more than five times its 8.3% share in Q2, now tied with retail.

Sector Snapshot

  • Office: Leasing rebound. Vacancy was 22.3%, with prime rents at $46.97/SF.
  • Industrial: Absorbing. Vacancy was 11.1% on 1.5 million SF of Q3 absorption.
  • Retail: Improving. Vacancy fell to 8.1% in Q2, and Center City occupancy reached 84.2%.
  • Multifamily: Tight. Occupancy was 95.4%, above the national average.

Philadelphia Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across Greater Philadelphia, including the Pennsylvania suburbs and South Jersey, are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Office: 45.6%
  • Retail/Storefront: 45.6%
  • Warehouse/Industrial: 8.8%

Three-Quarter Trend

  • Office: 6.2% in Q1, 8.3% in Q2, 45.6% in Q3
  • Retail/Storefront: 71.5% in Q1, 69.6% in Q2, 45.6% in Q3
  • Warehouse/Industrial: 22.6% in Q1, 22.8% in Q2, 8.8% in Q3

Key Takeaways

  • Office demand rose more than fivefold, from 8.3% to 45.6% of Philadelphia searches, drawing even with retail.
  • Short-term office demand leads. 52.0% of Q3 office searches sought terms under one year, up from 43.5% in Q2.
  • Retail tenants favor mid-length terms. 31.8% of Q3 retail searches sought 2 to 3 year terms, up from 22.2% in Q2.
  • The suburbs lead location interest. Delaware County was the most requested area, followed by Chester County, Bucks County, Market Street East and West, Philadelphia, and Burlington and Camden counties.

Office Market

Key Metrics (Q3 2026)

  • Vacancy: 22.3% (CBRE)
  • Prime asking rent: $46.97/SF (CBRE)
  • Leasing: 3.7 million SF year to date, more than any full year from 2020 to 2024 (CBRE)
  • Submarkets (Q2): Central Bucks at 15.0%, University City at 18.7%, Conshohocken at 19.0%, Lower Bucks at 19.6%, Market West at 22.6%, King of Prussia at 26.9%, and Delaware County at 28.5% (CBRE)
  • Notable deals: Burlington acquired 441,000 SF at 3151 Market St, Chubb committed to a 438,000 SF headquarters at 2000 Arch St, and Hanwha leased 64,400 SF at the Navy Yard (JLL and Savills, via Bisnow)

TenantBase Office Activity

Demand share: 45.6% of Philadelphia tenant searches, up from 8.3% in Q2 and 6.2% in Q1.

Lease term preferences:

  • Less than one year: 52.0%
  • 3 to 5 years: 24.0%
  • 5+ years: 16.0%
  • 2 to 3 years: 8.0%

Space requirements by term:

  • Less than one year: 500 to 3,000 SF
  • 2 to 3 years: 500 to 1,000 SF
  • 3 to 5 years: 1,125 to 2,375 SF
  • 5+ years: 1,375 to 3,125 SF

TenantBase data vs. the market: Delaware County, the most searched area on TenantBase, has 28.5% office vacancy, giving small tenants strong options and leverage. Tenants targeting Central Bucks or Conshohocken face tighter conditions near 15% to 19%.

Industrial & Warehouse Market

Key Metrics (Q3 2026)

  • Vacancy: 11.1%, up 70 basis points year over year (CBRE)
  • Net absorption: 1.5 million SF in Q3 and 3.7 million SF year to date (CBRE)
  • Average asking rent: $12.21/SF NNN, down 2.2% year over year (CBRE)
  • Under construction: 3.2 million SF (CBRE)
  • Submarkets: Northern Delaware at 9.1%, Southeast Pennsylvania at 10.5%, and Southern New Jersey at 12.6% (CBRE)
  • Notable lease: US Elogistics, 250,000 SF in Southern New Jersey (CBRE)

TenantBase Industrial Activity

Demand share: 8.8% of Philadelphia tenant searches, down from 22.8% in Q2 and 22.6% in Q1.

TenantBase data vs. the market: With vacancy above 11% and rents easing, industrial tenants have more choice and room to negotiate.

Retail Market

Key Metrics (Q2 2026)

  • Vacancy: 8.1%, down 30 basis points from Q1 (CBRE)
  • Average asking rent: $19.98/SF NNN for in-line space (CBRE)
  • Center City occupancy: 84.2% in March 2026, a two-year high (Center City District)

TenantBase Retail Activity

Demand share: 45.6% of Philadelphia tenant searches, down from 69.6% in Q2.

Lease term preferences:

  • 2 to 3 years: 31.8%
  • 3 to 5 years: 27.3%
  • 5+ years: 22.7%
  • Less than one year: 13.6%
  • 1 to 2 years: 4.5%

TenantBase data vs. the market: With Center City occupancy rising, retail tenants targeting Market Street East and West should expect growing competition for storefronts.

Multifamily Market

Philadelphia average apartment rent was $1,869 as of June 2026, up 1.6% year over year, according to Yardi Matrix. Occupancy was 95.4%, well above the 94.1% national average, and more than 13,800 units were under construction.

Q4 2026 Outlook

  • Office: Expect strong leasing momentum, with suburban submarkets offering tenant leverage.
  • Industrial: Expect vacancy to ease as absorption continues.
  • Retail: Expect Center City occupancy to keep improving.
  • Multifamily: Expect high occupancy to hold.

Frequently Asked Questions

What type of commercial space are Philadelphia tenants searching for in 2026?

In Q3 2026, office and retail/storefront space each made up 45.6% of Philadelphia tenant searches on TenantBase. Office share rose from 8.3% in Q2.

Which Philadelphia areas are tenants searching most?

Delaware County was the most requested area on TenantBase in Q3 2026, followed by Chester County, Bucks County, and Market Street East and West.

What is the office vacancy rate in Philadelphia?

Greater Philadelphia office vacancy was 22.3% in Q3 2026, according to CBRE.

What is the industrial vacancy rate in Philadelphia?

Greater Philadelphia industrial vacancy was 11.1% in Q3 2026, according to CBRE.

How can I find commercial space in Philadelphia at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across Greater Philadelphia at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Philadelphia, July 1 to September 30, 2026
  2. TenantBase, Philadelphia Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Philadelphia Commercial Real Estate Market Report, Q1 2026
  4. CBRE, Philadelphia Office Figures, Q3 2026
  5. CBRE, Philadelphia Office Figures, Q2 2026
  6. Bisnow, Philadelphia Q3 Office Reports (JLL, Savills), October 2026
  7. CBRE, Philadelphia Industrial Figures, Q3 2026
  8. CBRE, Philadelphia Retail Figures, Q2 2026
  9. Center City District, Center City Retail Occupancy, April 2026
  10. Multi-Housing News, Philadelphia Multifamily Report (Yardi Matrix), August 2026

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.