Space demand generated by the creation of 15,000 office-using jobs is among the factors that stemmed the tide, according to Jeff Algatt, regional manager in the local office of Marcus & Millichap. A report from the local office of CB Richard Ellis also points out that Center City "is removing sub-par office buildings from the rentable office inventory for condominium conversions."
The firm's data projects a modest increase in the average asking rent rate throughout the MSA to $22 per sf and a similarly modest increase to an average of $18.41 per sf in effective rent rates. "Concessions account for 16% of asking rents," Algatt says, "a slight improvement from 2004, but well off the recent low of 10% recorded in 2000."
Of the area's 10 submarkets, at $35.10 per sf, Bala Cynwyd commanded the highest asking average rate for class A office space, according to C&W's year-end data, which put the average among all submarkets at $25.77 per sf. The direct vacancy rate for the entire MSA ended the year at 15.4%, according to C&W, and the overall average asking class A rental rate was $25.36 per sf.
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