Blocks shuffle as tenants relocate, but with inbound leasing down, absorption remains stagnate
Market West emerged from the second quarter with net positive absorption, a welcome change from recent history, but largely the result of long-planned relocations of existing tenants. 1735 Market continued to backfill its large blocks: Montgomery McCracken settled in on three floors, opening up the high-rise at 123 South Broad, and Brandywine Global has begun its transition back across the Schuylkill, creating a large block at Cira Centre. Departures and downsizings continue to offset gains, with Four Penn Center now marketing five full floors in the wake of CHUBB’s departure and Equus decamping for Newtown Square’s Ellis Preserve. In Market East, the Public Ledger Building is poised to reposition as the western portion of the building changes hands and the departure of Health and Human Services to 801 Market creates opportunities to attract a new tenant mix. It is likely that the eastern-facing portion of the building will be redeveloped into residential or hotel. A proposal from the Philadelphia Bar Association and other non-profit partners would bring a new 173,000 s/f office building to 8th and Vine to house the Equal Justice Center, offsetting any inventory reductions at Public Ledger and bringing new groundup construction product to this part of the city for the first time in decades.