COMMERCIAL PROPERTIES
Q2 2021 Summary
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King of Prussia’s strong commercial real estate market continues to rise out from pandemic woes.
The vacancy rate for Class A office space hovered at 16.7%, similar to the previous quarter. The consistent vacancy rate is only distinguished by a slight decrease in average lease rate by $0.29 to $39.19/SF.
Class B office vacancy also remained the same from Q1 2021 at 11.4%, which is the same as Q2 2019 but still considerably lower than the rate for most of the past decade, including a high of 26% vacancy rate for Q3 2012. The average lease rate for this office space category also decreased slightly by $0.48 to $22.19/SF.
Vacancy rates for Class C office space also stayed the same as Q1 2021 but experienced the greatest fluctuation over the 12-month period, jumping from 8.1% in Q2 2020 to 20.9% at the end of this quarter. However, the inventory in Class C office spaces remains small compared to the other classes with only 282,628 SF over 13 properties. The average leasing rate increased by $.22 since the first quarter. over the same period by a dollar to $24.14/SF.
The unwavering vacancy rate for all office classes combined in Q2 2021 averaged 15.1%. This is a slight increase of 2 points from the end of Q1 2020 but 2.6 points lower than the same time a decade ago. King of Prussia’s average lease rate is higher at $34.66/SF, an increase of $12/SF from the previous decade.
Industrial and flex space mirrors the assorted office sectors. Vacancy rate for industrial property remained minuscule at 0.4% with a slight decrease by $.50 in the average lease rate of $10.18 NNN. Flex properties remained steady at 20.5% vacancy rate while the average lease dropped slightly to $38.69 NNN from Q1 2021.
Commercial retail space is holding its own as consumer spending continues to grow. The National Retail Federation revised its annual forecast for 2021 showing an increase in U.S. retail sales to $4.44 trillion. The new 2021 projection, which accounts for nearly half of all consumer spending, is an increase from $4.02 trillion in total retail sales in 2020. Optimism in consumer spending helps the vacancy rate in King of Prussia remain low at 3.2% with average lease rates increasing by $2.47 to $29.28 NNN at the end of Q2 2021.
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Eric T. Goldstein
Executive Director
King of Prussia District
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Dermatology Partners Opens Flagship Office in King of Prussia |
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Recognizing the opportunities available in our community, Dermatology Partners, formerly Pennsylvania Dermatology Partners, made a considerable investment in King of Prussia with the purchase of the 17,134 SF office building at 200 Mall Boulevard in the first quarter of 2021. Founded in 2012 with one office in Berks County, this medical group expanded quickly in Pennsylvania and Delaware, opening the 22nd office in King of Prussia. After initial improvements, the medical group opened the flagship facility on May 17, providing medical and cosmetic dermatology services to patients from across the region. The company is excited about the next level of redesign that transforms the third floor into a Mohs micrographic (skin cancer) surgery center.
“This building was a big investment for us, and one that we know will serve the community well. Having a surgery center on site means convenience for patients as well as a continuity of care since it allows for us to be a part of their skin cancer treatment every step of the way,” said Dr. Daniel Shurman, CEO, in an April 9th press release.
We are glad Dermatology Partners chose King of Prussia for their flagship office and invested even more “skin” in the commercial real estate game by purchasing the medical facility at 200 Mall Boulevard. The expansion into our community reinforces KOP’s strong position in the health care industry.
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Commercial RE Transactions |
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Sales
MJT Builders LLC
208 River Rd.
$500K
Jack Lingo Asset Management
211 S. Gulph Rd.
$25.8M
E. Kahn Development Co
760 Moore Rd.
$24M
Velocity Venture Partners
451 Yerkes Rd.
$2.5M
Leasing
University of Pennsylvania
411 Swedeland Rd.
150,000 SF
Purolite
3700 Horizon Dr.
68,000 SF
Impact Health
1016 W. Ninth Ave.
29,348 SF
Regus
630 Freedom Business Center Dr.
23,370 SF
310 Hanson Access Rd.
16,800 SF
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640 Freedom Business Center Dr.
13,377 SF
378 Crooked Ln.
7,500 SF
640 Freedom Business Center Dr.
6,745 SF
475 Allendale Rd.
6,696 SF
Tetra Tech
234 Mall Blvd.
6,408 SF
780 Fifth Ave.
5,800 SF
150 Allendale Rd.
4,500 SF
500 Lower E. Valley Forge Rd.
3,375 SF
491 Allendale Rd.
2,830 SF
610 Freedom Business Center Dr.
1,971 SF
150 Allendale Rd.
1,511 SF
150 Allendale Rd.
1,000 SF
* Commercial Office
* Retail
Not a complete listing.
Retail leases submitted to King of Prussia District for Q2 2021 as of 7/16/21. All other sales and leasing info from CoStar.
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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.
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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. |
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234 Mall Boulevard, Suite 150, King of Prussia, PA 19406
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© 2021 King of Prussia District. All rights reserved. |
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