Economy
Nonfarm employment across the Philadelphia industrial region remained stable year-over-year near 1.0 million employees, reflecting the continued strength of the region’s labor market. Over the same period, the regional unemployment rate declined by 70 basis points (bps) to 4.5%. The market’s concentration of health services, education, and technology-related careers remained substantially above the national average.
Supply And Demand
Tenant demand across the Philadelphia region totaled nearly 2.0 million square feet (msf) in Q3, bringing the year-to-date (YTD) new leasing total to 8.1 msf. Burlington County continued to lead the region’s activity with more than 3.0 msf leased YTD, supported by domestic and East Asian third-party logistics (3PL) occupiers. Four leases exceeding 100,000 square feet (sf) were signed, nearly all by 3PL service providers.
The Philadelphia region recorded its fourth consecutive quarter of positive net absorption, totaling 1.2 msf in Q3. Occupancy gains were concentrated in Burlington and Salem counties, where 3PL companies claimed vacant space; Southern New Jersey accounted for nearly three-quarters of the region’s 5.1 msf YTD absorption. With tenant departures slowing and occupancy gains persisting, the region’s vacancy rate has decreased by 180 bps YOY and Southern New Jersey vacancy has improved 370 bps.
Philadelphia County accounted for more than 30.0% of the 2.7 msf delivered across the region in 2026 YTD, with most completions developed on a speculative basis. In contrast, Q3 construction starts totaled 1.4 msf, driven by a single 1.2-msf owner-occupied build-to-suit project, while speculative starts were limited to two 100,000-sf buildings.
