Commercial vacancy rates in King of Prussia remain steady after a dramatic jump in leasing lab, office and flex space for life science and healthcare sectors.

The vacancy rate for Class A office ticked up less than a point to 10.8% from the previous quarter and almost 6 points below the same time in 2019, prior to disruptions from COVID-19. This small increase indicates continued desirability for KOP's Class A inventory.

Class B office vacancy rate jumped by more than 6 points to 14.5%, according to CoStar, with 141,000 SF coming back to the market. The inventory remained the same from last quarter at 2.1M SF. Vacancy rate for Class C office remained the same at 8.9% for the three quarters of 2022. However, the inventory in Class C office space is very small compared to the other classes, with only 282,628 SF in 13 properties. When all three office classes are combined, the aggregate Q3 2022 vacancy rate was 11.8%. 

Flex and industrial space mirrors the steady trend of the office sector. Vacancy rate for flex, lab and R&D space remained solid at 4.6% while industrial property vacancy rate was 1.1%.

Commercial retail vacancy rate in King of Prussia remained steady at 3.2%/SF.  

Eric T. Goldstein

President & CEO

King of Prussia District

Business Spotlight

Greenphire Expands King of Prussia Headquarters

On October 19, Greenphire held a ribbon cutting ceremony to celebrate the expansion of their King of Prussia headquarters.

Since its founding in 2008, Greenphire has grown to more than 350 employees and now occupies two floors within 1018 W. 9^th Avenue. While speaking with Eric Goldstein of King of Prussia District at the event, Greenphire’s CEO, Jim Murphy, described King of Prussia as an ideal location for recruitment and retention. Mr. Murphy also spoke about the excitement and momentum building in King of Prussia and cited the benefits of the community’s rich amenities including the abundance of retail, restaurants and entertainment for the company’s employees.

Greenphire is the leading provider of global financial lifecycle management solutions for clinical trials, delivering the most complete data and workflow automation from budgeting through analysis. The company is routinely featured as one of the fastest growing companies in the region.

1018 W 9th Avenue | greenphire.com

Return to Office Continues to Climb

More employees are returning to King of Prussia since COVID upended our daily commutes to the office. 

King of Prussia District recently analyzed commute pattern data from Placer.ai that shows a positive trend over time from the initial drop in commuter traffic during 2020. With almost 367,000 trips by commuters in one week in September 2019, the number of visits dropped by 40% during the same time in 2020. This dramatic change remained steady through 2021. This past September the data showed a recovery of about half of the pre-pandemic trips. The following chart shows the variation in employee trips to Upper Merion Township, King of Prussia District's boundary properties and the corporate campuses of Moore Park and Renaissance Park on the third week of September between 2019 and 2022.

Since Moore Park and Renaissance Park have more traditional office space than other areas in Upper Merion Township, it is expected that the return of office employees will take longer, but the trend is positive as properties and tenants assess their current needs. Moore Park experienced an increase in trips of16%, while Renaissance Park jumped 62% from its low in 2020.

Current office policies continue to swing away from remote-only to hybrid or traditional on-site commutes. Gallup conducted a survey of remote-capable office employees in June 2022 and found both hybrid and on-site work practices continue to grow. Based on the representative survey sample, 55% of this U.S. workforce expect to follow a hybrid model for the remainder of the year while 23% expect to work exclusively on-site. This is an increase from 42% and 19%, respectively, from the respondents’ workplace location just 4 months earlier. In contrast, only 22% of surveyed employees expected to remain remote for the remainder of the year and beyond, a significant drop from 39% working solely remote in February 2022. While employee preference is still for flexibility, the overall return to commercial office space is gaining momentum.

MLP Ventures expanding King of Prussia office building to include more life sciences space

SEPTA authorized to spend $200M on about 70 properties to make way for King of Prussia Rail

Valley Forge Park gets $150M in state funding

Not a complete listing. Retail leases submitted to King of Prussia District for Q3 2022 as of 10/28/22. All other sales and leasing info from CoStar.

King of Prussia District is a 501(c)(3) not-for-profit, special services organization. King of Prussia District 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 King of Prussia District. 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. King of Prussia District uses "Direct % Vacant Available" in its vacancy reporting. All industrial and flex statistics are NNN.

234 Mall Boulevard, Suite 150, King of Prussia PA 19406 

484.681.9452 | Info@kopbid.com

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