 |
,
According to Bisnow, Q2 2017 has been a strong quarter in King of Prussia for commercial office leasing. Despite the positive absorption reported by Bisnow, CoStar reports show a rise in commercial office vacancy rates, although likely due to timing. Overall Q2 2017 commercial office vacancy rates closed at 15.2%, which remains 3 points lower than the same quarter in 2015. Average lease rates remained steady over the past two years with a slight increase to $24.69 per SF in 2017.
The increase in average commercial office vacancy is due mostly to the rise in Class A office vacancy which ticked up to 11.5%. This is an increase from 8.6% at the end of the same quarter in 2016 but still lower than the 14.4% from 2015. However, similar to average lease rates, Class A lease rates stayed strong over that same period of time with an increase of $2.20 since the end of the Q2 2015 to $28.54 per SF in Q2 2017. A number of LEED certified Class A buildings are reporting lease rates in the low to mid $30's.
Unfortunately, Class B office vacancy remains high. Class B has declined in the past year, however, by 3.7% to 24.2% at the end of Q2 2017, which is certainly a move in a positive direction. The average Class B lease rate has increased to $21.00 per SF. This is in contrast to Class C office space that has seen a surprisingly significant drop in lease rates by more than $4.00 per SF. Class C vacancy, perhaps due in part to the value now being offered, has dropped significantly from this time last year from 21.4% to 11.8% at the end of Q2 2017.
The demand for industrial and flex space remains strong and closed Q2 2017 at 2.8% with average lease rates of $7.21 per SF, NNN.
|
|
|
Philadelphia, King Of Prussia Saw Positive Office Trends In Q2
Companies on the Move to KOP
|
Philly's most notable suburban submarket, King of Prussia, saw 394K SF of positive absorption in the quarter, including the delivery of a new 110K SF building for [GeoBlue] and Hartford Funds moving into a 76K SF office. Both companies moved from Ardmore to KOP, reflecting that the expansion of the King of Prussia Mall, as well as the King of Prussia Town Center, are on their way to creating a respectable live-work-play environment in the suburbs.
|
Strong Leasing & Interest Generate Top Dollar Sale of KOP Town Center
Partially Leased Town Center Sells for $183M
|
The 263,423-square-foot King of Prussia Town Center has been acquired by a fund advised by CBRE Global Investors.
The fund paid $183 million for the newly constructed open-air shopping center at 155 Village Drive in King of Prussia, according to a person familiar with the transaction who was not authorized to discuss it publicly.
"King of Prussia Town Center is a one-stop shopping and dining destination located on the border of Pennsylvania's wealthiest counties, serving some of the nation's most affluent and well-educated populations," Kim Hourihan, portfolio manager for CBRE Global Investors, said in the release.
King of Prussia Town Center is the retail centerpiece of the Village at Valley Forge, a 122-acre master-planned, mixed-use development that will feature nearly 3,000 residential units and 1 million square feet of commercial space upon completion.
|
Business in the Spotlight:CardConnect
A New Wave of Payment Processing Grows in King of Prussia
|
The fintech sector's CardConnect is making big news in King of Prussia and the payments processing field. The publicly traded firm has been acquired by its biggest supplier, First Data Corp. out of Atlanta, for $750M. While this is a major change, the management team, bulk of employees and company headquarters will remain in King of Prussia.
The acquisition is another important milestone for the company and CEO, Jeff Shanahan, as it prepares to grow and create 40 new positions to join the 140 employees working in the King of Prussia headquarters. In addition, CardConnect has 100 employees at other locations throughout the US, which helps this company develop cutting edge solutions with integrated payment platforms for its clients.
The company started in Ohio in 2006 and moved to the Philadelphia region in 2012 to access the highly educated talent pool with a lower cost of living. In order to continue industry-leading innovation, Jeff has cited the need for better modes of transportation, including direct access to rail, to help recruit and retain a talented workforce that will benefit King of Prussia businesses and community at large.
1000 Continental Dr #300
|
In the News
Liberty Property Trust Selling KOP Office Park Buildings
Liberty Property Trust has put up for sale a portfolio of 14 office and light-industrial buildings at its Renaissance Park corporate center in King of Prussia
.
Read More...
After $183M Buy, New King of Prussia Town Center Owner to Focus on Vacancies
Philadelphia Business Journal
With a $183 million, or $700 a square-foot, sale of the King of Prussia Town Center completed, the new owner of the property turns its attention to leasing up the remaining space at the retail property.
Read More...
More Citified "Main Street" Coming to a Suburb Near You
philly.com
"Imagine if that was your bank, that was your favorite restaurant, that was where you lived," she said. "You'd never have to leave the community."
Read More...
|
|
Retail Leasing Activity
|
ORCHESTRA FRENCH FASHION FOR KIDS
KING OF PRUSSIA MALL
4,405 SF
HABIT BURGER
KING OF PRUSSIA TOWN CENTER
4,289 SF
CHOOLAAH INDIAN BBQ
KING OF PRUSSIA TOWN CENTER
2,700 SF
MARC CAIN
KING OF PRUSSIA MALL
2,500 SF
TRUE FOOD KITCHEN
KING OF PRUSSIA MALL
7,000 SF
BATH AND BODY WORKS/WHITE BARN
KING OF PRUSSIA MALL
3,902 SF
SOUTH MOON UNDER
KING OF PRUSSIA MALL
3,200 SF
BLUESTONE LANE
KING OF PRUSSIA MALL
421 SF
CLARKS
KING OF PRUSSIA MALL
2,767 SF
FINISH LINE
KING OF PRUSSIA MALL
5,886 SF
|
G STAR RAW
KING OF PRUSSIA MALL
2,174 SF
FENDI
KING OF PRUSSIA MALL
2,312 SF
BVULGARI
KING OF PRUSSIA MALL
2,202 SF
TUTTI SPA & NAILS
KING OF PRUSSIA MALL
2,108 SF
234 MALL BLVD.
2,107 SF
DUCK DONUTS
KING OF PRUSSIA TOWN CENTER
1,500 SF
ECCO
KING OF PRUSSIA MALL
1,300 SF
JOIE
KING OF PRUSSIA MALL
1,230 SF
UNTUCKIT
KING OF PRUSSIA MALL
1,212 SF
LE CREUSET
KING OF PRUSSIA MALL
1,012 SF
Not a complete listing.
Leases submitted to KOP-BID for Q2 2017, as of 7.18.17.
|
|
|
|
King of Prussia District (KOP-BID) is a 501(c)(3) not-for-profit, special
services organization. KOP-BID engages public and private partners to
collaboratively improve the economic environment in King of Prussia
by making it more vibrant, attractive and prosperous.
Learn more at visitKOP.com
DISCLAIMER: All information obtained using CoStar Analytics and field checked for accuracy by KOP-BID. Vacancy rates are calculated using existing, non-owner occupied commercial buildings in Upper Merion Township only, over 10,000 SF, Class A, B, and C plus retail, industrial and flex.
KOP-BID uses "Direct % Vacant Available" in its vacancy rate reporting.
|
|
234 Mall Boulevard, Suite 150, King of Prussia PA 19406
|
|
|
© 2017 King of Prussia District. All Rights Reserved.
|
|
|
|
|
|
