Empty storefronts are starting to proliferate Center City streets in the Philadelphia retail real estate market, possibly presaging the end of a five-year-old resurgence that peaked last summer with record rents along the core Rittenhouse shopping district streets of Walnut and Chestnut.
Area commercial real estate experts blame a supply glut, the closing of national brand stores, local competition, and online shopping, but it’s a disconcerting trend that – according to a recent article on Philly.com about Philly rental space and the general retail commercial real estate market – does not seem to be abating.
Vacancies are taking longer to fill and retail rents in the Philadelphia commercial real estate market are down about 10 percent this summer for the first time after several years of increases.
This report on Philadelphia retail commercial properties is being brought to you through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.
Mid-block rents in the last year among Philadelphia commercial real estate properties on Walnut Street – from the 1400 to the 1700 block – are $100 to $150 per square foot, compared with $130 to $170 per square foot last summer. Premium corners average from $185 to $200 per square foot and have not been affected.
Meanwhile, Philadelphia retail commercial real estate listings located mid-block on Chestnut Street, from the 1500 to 1700 blocks, now average between $60 and $75 per square foot, compared with $65 to $85 a year ago. Corner spaces on Chestnut are about the same, averaging between $90 and $100 per square foot.
More than 2.1 million square feet of Philly retail space in the city’s commercial real estate market has been added to the central business district and nearby neighborhoods in the last five years. This figure includes 730,000 square feet from the former Gallery at Market East, a mall that is in the process of being renovated.
Hundreds of national apparel chain stores – occupying some of the most desirable Philadelphia retail commercial real estate listings – are either facing bankruptcy or are closing stores. Couple that with the level of taxation facing Center City retailers — business income, use and occupancy, city and state property taxes, and others – and it’s even more difficult to keep stores occupied.
For more information about Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (firstname.lastname@example.org) or Tony Banks (email@example.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly retail space.
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