Investing in U.S. Office Buildings: Trends, Technology, and the Road Ahead

Historical Overview: 50 Years of Office Investment Cycles and Returns

Office building investments in the United States have navigated numerous cycles over the past half-century. Broadly, the market has seen periods of boom and bust driven by economic cycles, construction surges, and financial crises. Table 1 highlights some major milestones in U.S. office market vacancy rates as an indicator of these cycles:

Sources: Moody’s Analytics (via Condor Capital)condorcapital.comcondorcapital.com; FDIC, FYI on U.S. Office Marketsfdic.gov; NCREIF Index databluerock.combluerock.com; CNN/Reis vacancy datamoney.cnn.com.

Over these cycles, total returns for office investments have generally been robust in expansions and only briefly negative during severe downturns. According to NCREIF, the main institutional index, annual total returns for U.S. commercial real estate were positive in roughly 40 out of the past 44 yearsbluerock.com. Only the early 1990s slump and the 2008–09 crisis produced a few years of negative returns. Even the dot-com bust and the 2020 pandemic saw surprisingly resilient performance – in 2000 the office index stayed positive despite the tech stock crashbluerock.com, and in 2020 values dipped for a single quarter but ended roughly flat for the year. This underscores that long-term investors who can ride out volatility have historically seen office assets recover value. For instance, an office property bought five years before the pandemic (Q1 2019) was, on average, still valued 15% higher by mid-2024 despite recent declinesdeloitte.com. Real estate’s inherent income (leases), and factors like inflation-indexed rents, tend to provide a buffer, while physical assets recover as economies heal.

In summary, the past 50 years illustrate that office real estate is cyclical but mean-reverting. Overbuilding and recessions have periodically caused high vacancies and weak returns, but these have been followed by recoveries that rewarded patient investors. The key lesson is prudence during boom times (avoiding overleverage and oversupply) and conviction during busts, when well-capitalized investors can acquire assets at discounts and benefit from the next upswing. Many of today’s conditions echo past challenges, but also present a familiar opportunity for strategic investment.

Technology’s Influence on Office Demand and Design

Technological change has been a fundamental driver reshaping office space demand, layout, and usage over the decades. Each wave of innovation – from the dawn of computers to the rise of the internet and mobile tech – altered how and where we work:

• Computerization and Networking: In the 1970s–1980s, the introduction of word processors and personal computers began a revolution in office work. Early on, bulky “office automation” equipment had to be housed in centralized areas, briefly re-centralizing office layouts in the 1970swashingtonpost.com. But as PCs shrank and landed on every desk in the 1980s, connectivity and digital workflows took offwashingtonpost.com. Offices adapted with new furniture and layouts – for example, cubicles with higher partitions became common, aiming to give workers privacy to focus on computer taskswashingtonpost.com. By the 1990s, email and internal networks allowed information to flow instantly, reducing the need for large file rooms and clerical pools.

• Rise of Open Plan and Flexible Layouts: Interestingly, open-plan offices predate modern tech (the concept dates to the 1950s–60s “Bürolandschaft” designswashingtonpost.com). But technology both enabled and necessitated layout changes. Mobile computing and Wi-Fi in the late 1990s and 2000s untethered employees from fixed deskswashingtonpost.com. As laptops and cell phones became ubiquitous around the turn of the millennium, companies were able to shrink the space per worker and encourage collaboration. Large cubicles gave way to long shared worktables and benching systems in forward-thinking firmswashingtonpost.com. Tech companies led this push, creating campus-like offices with casual lounges and amenities to foster interactionwashingtonpost.com. The philosophy shifted: instead of rows of private offices, space was designed to spur collaboration, reflecting a knowledge economy where ideas flowed more freely in open environments.

• Telecommuting, Hot-Desking, and Coworking: Internet and VPN technologies emerging in the late 1990s allowed some employees to work remotely, at least occasionally. By the 2000s, firms began experimenting with “hoteling” and hot-desks, letting staff reserve shared workstations on days they came inwashingtonpost.com. This model was enabled by faster internet, remote server access, and eventually cloud computing – work could be done from almost anywhere. The 2010s saw a boom in coworking spaces (e.g. WeWork and similar providers), which leveraged technology (online booking, access control apps) to offer on-demand offices for startups, freelancers, and corporate satellite teams. Coworking’s rise was in part a cultural shift, but also a tech story: without cloud software, video conferencing, and collaboration tools, this flexible work style wouldn’t be feasible. By mid-2010s, many large companies also adopted activity-based workplace designs – fewer assigned desks, more shared meeting hubs – counting on mobile tech and softphones to keep employees productive in any corner of the office.

• Remote Work Revolution: All these trends culminated in the ability for knowledge workers to work fully off-site. Over 30 years, a suite of innovations made work-from-home viable: affordable home PCs and Microsoft Office in the early 1990s, widespread email and the Web by late 90s, broadband internet in early 2000s, smartphones by 2010, and crucially, usable video conferencing in the 2010scepr.org. Each step increased the practicality of remote collaboration. By 2020, platforms like Zoom, Microsoft Teams, and cloud documents allowed real-time teamwork from anywhere. This technological maturity meant that when the COVID-19 pandemic hit, tens of millions could abruptly switch to working from home with relative continuity.

• Impact on Demand and Configuration: Technology has thus reduced the square footage needed per employee (through digitization of records, open layouts, and desk-sharing) and introduced new competition to traditional office leasing (through coworking and remote work). Even before 2020, there was a gradual structural decline in office space demand per capita – one analysis notes that U.S. office vacancies had been creeping upward since the 1980s, in part because companies learned to operate with leaner space and **“open-air offices with cubicles” to cut costscondorcapital.com. Essentially, tech allowed businesses to do more with less space. For investors, this means that highest returns have often come from buildings that stay ahead of these trends – properties that can be reconfigured easily, offer robust IT infrastructure, and amenities that attract workers to the office despite the allure of remote work.

In summary, technological advancements have been a double-edged sword for office real estate. They empower new ways of working that can reduce overall demand, but they also create opportunities – demand for high-tech office fit-outs, new types of workplaces (flex space, incubators, etc.), and growth of sectors like tech and creative industries that still value collaborative office environments. Savvy investors monitor these shifts: for example, the current rise of hybrid work (people splitting time between home and office) is driving demand for modern, “smart” offices with video conferencing rooms, strong networks, and collaborative spaces to complement remote days. Buildings that can provide an experience superior to working from home – leveraging technology for convenience and connectivity – are best positioned to retain high occupancy going forward.

COVID-19 Shock: Remote Work, Vacancies, and Investor Sentiment

The COVID-19 pandemic was an unprecedented shock to the office market, accelerating trends that had been percolating for years. Its effects on tenant behavior, vacancies, and investor sentiment have been dramatic:

• Remote Work Goes Mainstream: Before 2020, only about 8–9% of U.S. employees worked primarily from homecbreim.com. By 2021, that share had tripled to 32% of office employees working primarily remotecbreim.com – roughly 12 million people who previously commuted now mostly stayed home. Even as the immediate crisis subsided, habits changed: as of 2023, around 28% of work days nationally are still done from home, nearly six times the pre-pandemic raterichmondfed.org. Surveys find both workers and employers expect hybrid arrangements to be permanent, with employees valuing the time saved from commuting (over 72 minutes per day on average saved by WFH in one studyrichmondfed.org) and companies using remote flexibility as a perk in a tight labor market. This mass adoption of remote work has directly reduced demand for office space – one study estimated that a 10% increase in a firm’s remote job postings translates to a ~4–5% reduction in its office space needsrichmondfed.org.

• Skyrocketing Vacancy Rates: The immediate consequence of widespread remote/hybrid work has been a surge in office vacancies to record highs. By Q4 2023, 19.6% of office space in major U.S. cities was unleased – the highest vacancy rate since data tracking began in the late 1970scondorcapital.com. This surpassed the prior peaks of ~19.3% in 1986 and 1991. In practical terms, nearly 2 billion square feet of office space is now under-utilized due to remote work adoptioncbreim.com. Tenants have been subleasing or giving back space: roughly 243 million sq. ft. returned to landlords since 2020, with another 90 million sq. ft. listed for subleasecbreim.com. The vacancy rise has been broad-based but uneven: tech-heavy markets (e.g. San Francisco) have been hit hardest as many firms in those areas embraced full remote, whereas some Sun Belt cities (e.g. Miami) have fared bettercondorcapital.com. Notably, the physical occupancy of offices (turnstile counts) is lower than lease vacancy implies – in many cities actual office attendance is only ~50% on an average day (busy mid-week, thin on Mondays and Fridays)richmondfed.org. This signals a huge amount of under-used space even where leases are still in place.

• Investor Sentiment and Values: Investor sentiment toward offices turned decidedly cautious. Public markets provide a stark gauge: publicly traded office REIT indices fell by ~37.6% in 2022, and another ~15.9% by March 2023richmondfed.org, reflecting investors pricing in a severe and prolonged downturn in the sector. Private market values have also begun to correct: as interest rates rose sharply from 2022, capitalization rates (yields) expanded and property appraisals declined, especially for older buildings with dimming prospects. By early 2023, some high-profile office buildings in major cities were trading at 20–30% discounts to pre-pandemic valuations, or facing mortgage defaults and distressed sales. Loan delinquencies on office mortgages spiked – in the commercial mortgage-backed securities (CMBS) market, office loan delinquency jumped to about 5.8% in 2023, up from under 1% pre-pandemiccondorcapital.com. Banks (especially regional banks, which hold a large share of commercial real estate loans) grew increasingly wary; smaller banks have 4.4 times more exposure to CRE loans than big bankscondorcapital.com, leading to concerns about financial stability as office values fall. This negative sentiment has made new financing for office acquisitions or refis more expensive and scarce, further pressuring owners who face debt maturities.

• “Flight to Quality” and Bifurcation: A critical nuance in the COVID impact is the divergence between top-tier office properties and the rest. Even during the pandemic, newly built, high-quality office buildings in desirable locations often saw growing demandrichmondfed.org. Many large occupiers used this period to upgrade to better space (taking advantage of generous incentives), leaving behind older Class B/C buildings. As a result, while aggregate vacancies hit record highs, the pain is concentrated in lower-quality stock: it’s estimated that 90% of all U.S. office vacancies are in the bottom 30% of buildings by qualitybrookfield.com. Cushman & Wakefield research similarly found that only 7.5% of office buildings (generally older ones) account for over half of all vacant spacerichmondfed.org. Meanwhile, premier “trophy” offices in core locations are still reasonably full. This bifurcation in performance means investor sentiment is polarized – investors are still willing to pay premium prices (and accept lower yields) for modern, amenitized, green-certified buildings that tenants want, while values for aging offices have cratered. In effect, COVID-19 magnified a secular trend: the office market is no longer one monolith, but rather two markets – one of scarcity for quality space and one of oversupply for obsolete space.

• Occupier Strategies and Lease Trends: Occupiers (tenants) themselves have been re-evaluating their real estate strategies post-COVID. Many large companies continue to “right-size” their office footprint to match hybrid work schedules – for example, in Philadelphia, multiple major firms (law, healthcare, tech) announced 20–50% reductions in office space in 2023cresa.com. National surveys by CBRE in 2023 found over 50% of companies planned to reduce their office square footage in the near term, and a vast majority are adopting desk-sharing (unassigned seating) policies to use space more efficientlycbreim.com. However, as the pandemic effects normalize, some firms are also firming up requirements for in-office attendance (to bolster collaboration and culture). CBRE’s Spring 2023 occupier survey showed a growing share of employers demanding more days in office (45% of companies expected full-time or mostly in-office work, up from 37% a year prior)cbreim.com. In contrast, a minority (~22%) are staying almost fully remotecbreim.com. The implication is that while hybrid is here to stay, most organizations are gravitating to a middle ground – e.g. 3-4 days in office, 1-2 days remote – which will still require substantial office footprints, just not as much as in 2019. To lure staff back, many companies are upgrading offices with better amenities (cafés, fitness, outdoor spaces, etc.) and choosing locations with shorter commutes (e.g. near transit or in suburban hubs)cbreim.com. This is an important silver lining: tenants are still investing in office space, but focusing on quality and efficiency over quantity.

• Adaptive Reuse and Conversion Trend: Facing persistent high vacancies in older office buildings, many cities and owners are turning to adaptive reuse (converting offices to alternative uses such as apartments, hotels, or labs). This trend, already present pre-COVID, picked up momentum as a solution to both the office glut and housing shortages in urban centers. For example, in downtown Philadelphia, at least 2.5 million sq. ft. of outdated offices are candidates for conversion, potentially removing ~6–7% of inventory and helping reduce vacancybisnow.com. High-profile conversions like 1701 Market Street (a 300,000 sq. ft. 1970s office high-rise turned into 299 apartments in 2024) demonstrate this in actioncresa.combisnow.com. New York City is considering zoning changes to allow more office-to-residential conversions in underused districtscondorcapital.com. These conversions artificially lower the vacancy rate by taking empty space off the market – indeed in Philly, the office vacancy rate ticked down slightly in mid-2024 (from 20.2% to 19.7%) not because of new leasing, but because converted buildings were removed from inventorybisnow.com. For investors, adaptive reuse can be a play to repurpose a struggling asset into a more in-demand property type. Local governments are increasingly offering incentives (tax abatements, grants) to support such conversions. While not every office can be converted (physical and financial constraints apply), this trend will chip away at the oversupply over the coming years, creating a floor under the office market and potentially yielding excellent returns for investors who execute conversions successfully.

In sum, COVID-19 delivered an extraordinary shock to the office sector – massively increasing vacancy and uncertainty. Investor sentiment turned bearish as traditional demand models were upended. Yet, it’s important to note that the office is not obsolete; rather, its usage is being redefined. The pandemic accelerated an evolutionary change: the offices that survive and thrive will be those that adapt – through better design, new uses, or by serving the sectors that can’t go remote (e.g. life sciences, medical offices, government). For investors today, the post-COVID landscape presents both challenges and opportunities: challenges in the form of near-term distress (high vacancies, struggling assets) but opportunities to acquire quality assets at lower prices or to reposition older buildings for tomorrow’s needs. Indeed, some see the current malaise as a chance for “distressed and value-add investors” to step in and repurpose buildings to meet shifting demand – risk and opportunity go hand in handcondorcapital.com.

Signs of Recovery: U.S. and Greater Philadelphia Trajectory

As we move through 2024 and into 2025, there are emerging signs that the U.S. office market is stabilizing and potentially hitting a bottom, setting the stage for a recovery. Industry data and forecasts point to an inflection, although the rebound is expected to be gradual and uneven across regions and asset types:

• National Stabilization Indicators: According to CBRE’s outlook, 2025 is poised to be a pivot year where the office market transitions from contraction to modest expansioncbre.com. A few key factors underpin this optimism:

  • Steady Office Attendance: By late 2024, many companies have established a “new normal” hybrid schedule, and office attendance levels have plateaued rather than falling furthercbre.com. This steadiness allows occupiers to plan real estate needs with more confidence.

  • Rightsizing Mostly Done: Much of the space downsizing occurred in 2020–2023. CBRE notes that after four years of adjusting portfolios, many firms have already shed the excess space that remote work made unnecessarycbre.com. Thus, the pace of space give-backs is slowing. In fact, more than one-third of large occupiers in a 2024 survey plan to increase their office footprint in the next two years (versus only 25% expecting further cuts)cbre.com. This suggests that beyond the initial shock, pent-up growth and new business formation are creating demand for office space again.

  • Positive Absorption Returning: Recent data supports this. Net absorption turned positive nationally in the latter half of 2024, after multiple quarters of declinenaiop.org. In Q4 2024 alone, U.S. net absorption was about +10.3 million sq. ft., the highest quarterly demand in three yearsnaiop.org. It marked the third consecutive quarter of net growth in occupied space, an encouraging sign that the market is at least plateauing. The NAIOP Research Foundation’s leading indicators also point to modest growth in office demand in 2025 (barring any major recession)naiop.org.

  • Vacancy Peaking: The overall U.S. vacancy rate dipped slightly to ~18.9% in Q4 2024 from its peak near 19%naiop.org. Analysts believe 2025 will see the national vacancy peak and start to inch down, especially as supply is curtailed. CBRE forecasts the peak vacancy at roughly 19% in 2025 and improvement thereaftercbre.comcbre.com. Already, the fact that Q3–Q4 2024 vacancies stopped rising suggests we’re near the top. “We’re beginning to see signs of a peak in those numbers,” noted one industry analyst of late-2024 datanaiop.orgnaiop.org.

  • Construction Slowdown: New supply coming to market has dropped sharply, which will help the vacancy situation. Only 24 million sq. ft. of office space was under construction nationwide at the end of 2024, less than half the volume a year earliernaiop.org. Developers have largely paused speculative office projects. CBRE expects just 17 million sq. ft. to deliver in 2025, way below the 10-year average of 44 millioncbre.com. Essentially, a dearth of new construction – combined with the removal of space via conversions – means the supply side is finally tightening. This gives the existing inventory breathing room to fill up as demand gradually returns. Indeed, office supply additions are at historic lowsbluerock.com; the trailing 2010s had the lowest new supply as % of stock in decades, and the next five years look similarly mutedbluerock.com. This disciplined supply environment is a critical ingredient for recovery.

  • Economic and Financial Tailwinds: The broader economic outlook is cautiously favorable. A “soft landing” (avoiding a deep recession) appears plausible in 2024, and office-using employment is at record levels in absolute termscbre.com – there are more white-collar jobs now than pre-pandemic, even if their office attendance per job is lower. Importantly, the interest rate cycle is expected to turn accommodative by 2025: if inflation abates, the Federal Reserve may cut rates, lowering financing costs and improving property values. Lower yields would also ease pressure on highly leveraged owners and could revive transaction activity as buyers and sellers find a price equilibrium. These macro tailwinds (growth, confidence, cheaper capital) are forecast to coincide with the 2025–2027 periodcbre.com, bolstering the real estate recovery.

• “Flight-to-Quality” Leading the Recovery: As noted, high-quality buildings in prime locations are recovering faster. CBRE projects that vacancy in prime (top-tier) office buildings will shrink back to ~8.2% by 2027, essentially returning to pre-pandemic tightnesscbre.com. In many top markets, Class A trophy towers are already experiencing increased competition among tenants, and landlords of such assets report rising rents. For instance, sunbelt cities like Miami have seen asking rents for the best offices jump nearly 20% since 2019cbreim.com, thanks to an influx of companies. In gateway cities, there is talk of an impending shortage of trophy space – much of it is already leased, and very little new is being built. Industry experts predict that in a few years top-tier buildings will be effectively “out of space,” forcing tenants to turn to the next tier downnaiop.orgnaiop.org. Indeed, there are early signs that demand is now beginning to spill over into upgraded Class B/A- buildings – Avison Young noted leasing activity in lower-tier buildings ticked up from 29% to 32% of deals between 2023 and 2024 as some tenants who can’t find or afford trophy space look for alternativesnaiop.org. This presents an opportunity for investors: acquiring solid but slightly dated buildings and modernizing them into attractive, mid-priced options may yield strong returns as the flight-to-quality wave moves down the quality spectrum. Overall, the narrative is that quality will lead the rebound, but over time, a broader base of buildings will stabilize as vacancies get back to equilibrium.

• Rent Trends and Investor Returns: So far, asking rents nationally have remained relatively stable through the pandemic, a bit counterintuitively, because landlords of quality buildings held rates (choosing to offer free rent and concessions rather than cut face rents). In markets like Philadelphia, for example, average asking rents actually increased slightly from 2020 to 2023 despite weaker demandnmrk.imgix.net – landlords maintained nominal rents (around $31–$34/SF) but gave generous incentives to retain tenantsnmrk.imgix.net. Now, as the market approaches recovery, effective rents are expected to firm up. In top markets with tightening prime vacancies, landlords have regained pricing power and rents are risingcbre.comcbre.com. In softer segments, rent growth may be muted, but the worst rent declines seem to be over (for instance, U.S. office rents fell nearly 10% in 2020–2021 on averagefdic.gov, but stabilized thereafter). For investors eyeing income returns, this stabilization is critical – it means property cash flows are near a floor. Any uptick in occupancy going forward will translate into improved NOI (Net Operating Income). Meanwhile, acquisition cap rates have expanded ~100–300 bps for offices in the past two years (depending on quality and market), which paradoxically improves the forward-looking return profile for new investors (buying at lower prices today sets the stage for higher yields and appreciation as the cycle turns). In short, those who invest during the trough stand to benefit from both improving fundamentals and some cap rate compression as confidence returns.

• Greater Philadelphia: Early Signs of Stabilization – Turning specifically to the Greater Philadelphia region, the office market here exemplifies many national trends, with some local nuances:

  • Occupancy and Absorption: After five years of net occupancy losses, Philadelphia is finally seeing a flattening out and even modest gains. From 2019 through 2023, the metro lost a cumulative 7.6 million sq. ft. of occupied office space as businesses contracted or closedphillyofficespace.com. This drove the region’s vacancy up from the low teens to over 20%. However, in 2024 the tide began to turn. For the first time since 2018, annual net absorption turned positive in the Philadelphia metrophillyofficespace.com. About 615,000 sq. ft. was added to occupied inventory in 2024phillyofficespace.com. While that only makes a small dent in prior losses, it is a critical inflection, signaling that move-ins are finally exceeding move-outs again. Even more telling, this improvement occurred despite a cooling in one of Philly’s growth drivers (life sciences demand slowed in 2024), which suggests broader-based stabilization across traditional office tenants (e.g. finance, legal, government)phillyofficespace.com. The latest Newmark data show that in Q4 2024 Greater Philadelphia recorded +128,700 sq. ft. of net absorption – the first quarterly gain since 2022nmrk.imgix.net – hinting at a possible resurgence into 2025. Suburban submarkets like King of Prussia and Radnor led in 2024 (each absorbing over 100k SF)nmrk.imgix.net, reflecting some companies relocating to or expanding in amenity-rich suburbs.

  • Vacancy Levels: Philadelphia’s overall office vacancy rate as of late 2024 stands around 20.5% (metro-wide), roughly on par with the U.S. averagenmrk.imgix.net. The City of Philadelphia (CBD plus University City) is a bit higher at 21.7% vacancynmrk.imgix.net, and within the CBD alone, vacancy is about 23.0% – a record high for Philly’s downtownnmrk.imgix.net. This illustrates that Center City has been hit harder, whereas some suburban areas are slightly tighter (Philly suburbs average ~19.7% vacancynmrk.imgix.net). University City, Philadelphia’s eds-and-meds hub, is a standout with only 11.5% vacancynmrk.imgix.net – dramatically lower than downtown – thanks to its concentration of universities, hospitals, and lab space which are in high demand. This bifurcation mirrors the national flight-to-quality theme: in Philly, brand-new or specialty buildings (like life science labs in University City, or the new trophy towers such as the Comcast Technology Center and the Morgan Lewis headquarters) have remained relatively well-leased, while older Center City office towers struggle with empty floors.

  • Rents and Leasing Activity: The average asking rent in Greater Philadelphia is about $31–$32 per sq. ft (full service) as of Q4 2024nmrk.imgix.netnmrk.imgix.net. This is a slight decline from earlier 2024 but still above pre-pandemic levels. Landlords have been loath to cut headline rents; instead, they offer hefty concession packages (free rent months, higher tenant improvement allowances) to attract or retain tenantsnmrk.imgix.net. This strategy keeps face rents relatively flat (Philadelphia’s asking rents even rose a few percent from 2020 to 2023nmrk.imgix.net), which helps preserve asset values on paper. We anticipate rent behavior will diverge by segment: Trophy properties in Philadelphia are managing to push rents upward (for instance, top of market Class A space in Philly commands $40+ per sq. ft, such as University City’s $43.67 average askingnmrk.imgix.net, reflecting its strength). Meanwhile, Class B/C landlords are more likely to reduce rents or continue generous concessions to fill space. On the leasing front, activity in Philly had a promising first half of 2024 but then slowed, ending the year with total leasing volume down from historical averagesnmrk.imgix.netnmrk.imgix.net. Tenants are generally signing longer leases for prime space (in 2024, deals over 10,000 SF averaged 7+ year terms, indicating commitment when they do choose a location)nmrk.imgix.net. Many tenants are opting to renew in place rather than relocate, given the cost of build-outs and caution about landlords’ financial healthcbre.comcbre.com. This reflects a broader trend: flight-to-quality doesn’t always mean moving; sometimes it means negotiating an upgrade or renovation with one’s current landlord.

  • New Development and Conversions: The Philadelphia region has a limited new office construction pipeline, which is good news in the current climate. As of Q3 2023, there were 21 office projects (about 3.7 million sq. ft.) under development in the metro, heavily concentrated in University City and the prime Market Street West corridorcresa.com. These include several high-profile projects: e.g., 3151 Market Street and 3201 Cuthbert Street (lab/offices at Drexel’s Innovation Campus), the new Chubb Insurance headquarters at 2000 Arch, and othersnmrk.imgix.net. Many of these projects were started pre-pandemic or are tailored to life sciences, indicating they have strong pre-leasing. Indeed, Philadelphia’s office construction pipeline has been shrinking – few new starts have broken ground post-2020nmrk.imgix.net. This aligns with the national trend of a construction pullback. On the other hand, adaptive reuse is accelerating: Philadelphia leaders have openly promoted office-to-residential conversions downtown. We’ve seen notable examples like 1701 Market (to apartments) completedcresa.com, the historic Philadelphia Bulletin Building (converted to labs), and plans for the giant Philadelphia Energy Solutions site (south of downtown) to include offices and labs in a mixed redevelopment. A Bisnow analysis found that in 2024, the small dip in Philly’s vacancy was entirely due to removing converted buildings from the inventorybisnow.com – highlighting how critical this avenue is for balancing supply. The city has even launched incentives (such as tax abatements on converted properties) to encourage more such projects. For investors, Philadelphia’s relatively older office stock (many buildings from the 1970s-80s) provides a vast opportunity for redevelopment into apartments, hotels, or modern office uses. The conversions not only help the office market by trimming excess, but also improve downtown vibrancy by diversifying use (more residential brings foot traffic to support retail, etc., which in turn makes downtown offices more attractive).

  • Market Sentiment and Competitive Position: Greater Philadelphia’s competitive position in a recovering market has both advantages and challenges. On the plus side, Philadelphia offers a more affordable alternative to Northeast peers like New York or Washington, D.C. Office rents are roughly half of Manhattan’s and significantly below D.C.’s, yet Philadelphia provides a large, skilled workforce and rich amenity base. This value proposition has already attracted some companies to move or expand in Philly for cost savings. The metro’s economy is anchored by “Eds and Meds” – Education and Health Services constitute the largest employment sector and continue to grow robustlynmrk.imgix.net. These sectors are inherently less remote-friendly (universities, hospitals, pharma labs require in-person work), which bodes well for related office demand. For example, medical office buildings in Philadelphia are 97%+ occupied on average – about 70 basis points higher occupancy than the top-10 U.S. city averagenmrk.imgix.net. Demand for medical office space is strong and rising, courtesy of an aging regional population and Philly’s world-class healthcare institutionsnmrk.imgix.netnmrk.imgix.net. Yet, rents for Philly medical offices have grown slightly slower than the national average, meaning investors can acquire at relatively attractive yieldsnmrk.imgix.net. This combination of high occupancy and reasonable pricing creates a unique opportunity in the medical office niche in Philadelphianmrk.imgix.net.

    Philadelphia also has a budding life sciences and biotech cluster. The past several years saw rapid growth in lab space development around University City. While 2023–2024 saw a pause (life science firms hit funding headwinds), the long-term trend is positive, as gene therapy and biotech companies spin out of local universities. Life science facilities often require office components and bring high-paying jobs that support the office market. In essence, Philly’s role as an innovation hub (science, healthcare, education) gives it a demand floor even as traditional office uses evolve.

    However, Philadelphia faces challenges too. Population and job growth in the region are steady but not spectacular. It’s not a Sun Belt boomtown; thus organic demand growth is modest. The city’s tax structure – including a wage tax on employees – has historically been seen as a business deterrent, though there are gradual reductions in place and incentive programs for employers. Another challenge is aging inventory: Philadelphia’s downtown has many older Class B/C office buildings with dated layouts and large floorplates that are tough to lease in a post-COVID world. These assets represent the bulk of the vacancy. Owners will need to invest in renovations or conversions, which not all are financially equipped to do (Philadelphia also has a higher proportion of local and private owners vs. institutional owners in some peer cities). This could lead to further distress or consolidation – indeed, ~23% of Center City’s Class A space is considered “distressed” as of 2024 (e.g. loans in default or significantly devalued)bisnow.com, which might trade at bargain prices to new investors who can recapitalize and repurpose. Finally, Philadelphia’s recovery is likely to lag that of high-growth markets; it depends on office-using sectors like finance, legal, government and those have been slower to recall workers in some cases. The good news is that even within those sectors, tenant demand in Philly has remained fairly resilient – by late 2024, the volume of tenants actively searching for space was higher than in 2023, indicating firms are again planning moves or expansionsnmrk.imgix.netnmrk.imgix.net. The majority of Center City office requirements are mid-sized (5,000–25,000 SF)nmrk.imgix.net, meaning Philly has a diversified base of smaller companies rather than over-reliance on a few giants (which is healthy for stability). Key industries driving recent leasing include the legal sector, finance/insurance (FIRE), and healthcarenmrk.imgix.net – all of which remain committed to having a physical office presence.

In summary, Greater Philadelphia’s office market is roughly tracking the national recovery, with perhaps a slight delay downtown offset by strength in specific niches (med/life sciences, select suburbs). The metro’s high vacancy is being addressed proactively through conversions and the completion of a few new, fully pre-leased projects. As the U.S. office market recovers in 2025–2027, Philadelphia is expected to benefit, albeit gradually. For investors, Philadelphia offers a compelling mix of stable, yield-generating assets (e.g. medical offices with 90%+ occupancy) and higher-risk, higher-reward repositioning opportunities (empty historic office buildings ripe for conversion). The region’s fundamentals – a large educated workforce, diverse economy, relatively low costs, and strategic location on the Northeast Corridor – remain strengths that will support office demand in the long run.

Looking Ahead: 2026–2027 Outlook and Investment Implications

Projecting into 2026 and 2027, the office sector is likely to look quite different from the 2010s, yet opportunities will abound for forward-thinking investors. Here are key trends and expectations for the next 2–3 years:

• Hybrid Work Becomes the Norm: By 2026, most companies will have fully institutionalized hybrid work policies. We expect typical office utilization to stabilize around 50–60% of pre-pandemic levels, with most employees in the office 2-4 days per week. This means companies will continue to use less square footage per employee than historically – a trend already baked into current vacancies. The focus for tenants will be on efficiency and experience: making sure the days people do come in are supported by collaborative spaces, training, and events that cannot be done remotely. For investors, this solidifies the thesis that properties with abundant flexible meeting areas, high-quality air systems, natural light, and amenities will outperform. It also means the market might not return to 95% occupied buildings – a new equilibrium occupancy might be, say, 85-90% for a healthy building, reflecting that some desks sit empty on any given day due to hybrid schedules. Investors should underwrite deals with realistic occupancy assumptions and perhaps shorter lease terms as flexibility is prized by tenants.

• Flight to Quality, Part II – The Upgrade Cycle: Through 2026–27, as top-tier offices fill up and even approach shortage, tenants will increasingly shift attention to the next tier of offices. We anticipate a wave of retrofits and upgrades of Class B+ buildings to “near Class A” standards to capture this demand. This could be a golden opportunity for value-add investment: acquiring a well-located but under-invested building and modernizing it (adding tenant lounges, updated lobbies, fitness centers, etc.) can attract tenants who are priced out of the true trophy towers. By 2027, the market could see a relative outperformance of these renovated buildings as the “flight-to-quality” broadens into a “flight-to-value” – companies looking for quality without paying top dollar. On the flip side, truly outdated, location-challenged offices (especially many 1970s-vintage towers with large floor plates) may become functionally obsolete. Many of those will likely be taken out of the office inventory by 2026–2030 via redevelopment. Indeed, one study projects about 1.1 billion square feet of excess office space by the end of this decade, with only ~30% directly attributable to remote work and the rest due to over-supply and obsolete designrichmondfed.org. This underscores that redevelopment will be a major theme. By 2027, we expect every major city (Philadelphia included) to have converted a handful of older offices into apartments or other uses, with more in the pipeline – gradually whittling down the surplus and creating mixed-use urban cores. Investors who specialize in adaptive reuse could see significant activity as cities offer incentives to repurpose unleased offices (e.g. Philadelphia’s tax abatement for conversions, or federal programs that might emerge to support urban housing via office conversion).

• Demographics and Demand Drivers: Demographically, the mid-2020s are marked by two contrasting forces. First, the large Millennial cohort is fully in their prime work years and increasingly moving into management. This generation values flexibility but also collaboration – many surveys indicate younger workers want in-person mentorship and networking, which could drive some return-to-office momentum. Second, the Baby Boomers are retiring in large numbers, shrinking the overall workforce participation rate. Fewer workers (in certain industries) could mean less aggregate office demand, unless productivity or new job creation offsets it. Notably, the healthcare and life sciences sectors are growing due to aging populations, which is very relevant for office: medical offices, lab offices, and related administrative space will likely see increased demand through 2027. Philadelphia, for example, should benefit from this as a healthcare hub – the percentage of elderly residents in the region is rising, and medical office occupancy has grown ~1% since 2020 as a resultnmrk.imgix.net. So, while a generic insurance office might shed space, a healthcare provider or biotech firm might expand. Similarly, government agencies and defense contractors (in some markets) are more tethered to offices and could be stable or grow with public spending. Another factor is talent location: if companies continue allowing hybrid, they can recruit from anywhere, but many still want hubs where employees can convene. Cities that offer a good quality of life and moderate costs (like Philadelphia) could see relative gains if some talent relocates from pricier areas. We could envision, for example, a New York-based company opening a satellite office in Philadelphia by 2026 to tap into its workforce while saving on rent – a trend of “geoarbitrage” that some companies are already exploring.

• Economic Outlook and Capital Markets: The broader economic forecast for 2026–27, while inherently uncertain, currently suggests moderate growth. If inflation is tamed and interest rates revert toward historical norms, cap rates for offices may compress slightly from their 2023 highs, boosting values for those who bought at the bottom. However, expectations are that rates will remain higher than the ultra-lows of 2019–2021, implying a “higher for longer” environment. Investors should thus focus on cash flow resiliency and debt management. Those with dry powder in 2025 can take advantage of distressed sales; by 2026, as fundamentals improve, we might see an uptick in institutional investors re-entering the office sector looking for bargains. Remember that by some measures, offices have been the worst-performing real estate asset class in the early 2020s, and many large investors cut allocations to office – any signs of stabilization could lead to a contrarian wave of capital back into select office deals (especially high-yield or repurpose plays). Notably, mergers and acquisitions activity among real estate owners is expected to rise – surveys show 68% of firms plan to increase M&A in the near termdeloitte.com, potentially leading to consolidation (e.g. stronger players buying out weaker office REITs or portfolios at a discount). For private investors, partnering with experienced operators and perhaps co-investing with opportunistic funds could be a way to participate in these larger-scale acquisitions that reshape city skylines.

• Workplace Trends and Tenant Preferences: By 2027, we anticipate the narrative around remote work will have shifted from whether to return, to how to make the office most effective. There is likely to be continued experimentation with workplace formats: for instance, more companies could adopt “hub-and-spoke” models, maintaining a main office hub downtown and smaller satellite offices in suburbs or secondary cities (to be closer to where employees live). This could actually expand total leased footprint for some firms (albeit in multiple smaller locations). Flexible space and shorter leases might be more common – landlords could operate portions of buildings as flex suites to accommodate tenants who want agility. Smart building technology will be a differentiator: offices equipped with sensor-driven utilization data, app-based desk booking, touchless systems, and strong cyber-security for remote collaboration will appeal to tenants. Wellness and sustainability will also be front and center. By 2026, many companies have net-zero or ESG goals; they will prefer green-certified buildings with energy-efficient systems. Philadelphia is already seeing this: landlords are upgrading HVAC and attaining LEED certifications to remain competitive. Expect more retrofits for energy efficiency – which is both a challenge (capital cost) and an opportunity (access to ESG-focused investment funds, and potential higher rents from climate-conscious tenants).

• Greater Philadelphia Outlook: For Philadelphia specifically, 2026–27 should bring incremental improvement. City officials and businesses are actively working to “reimagine” downtown to make it more of a live-work-play environment, learning from successful mixed-use districts in other cities. For example, expanding residential conversion programs and enlivening the streetscape (the Center City District has reported a strong comeback in retail occupancy – downtown retail is back to ~89% occupied, up from 55% in mid-2020cresa.com – which helps make the area attractive for office workers again). Philadelphia’s major developments coming online by 2025 (such as the Schuylkill Yards projects and the Navy Yard expansions) will by 2026 either be absorbed or will have drawn new tenants to the region, potentially adding jobs. The competitive advantages – lower cost Class A space and abundant talent from local universities – may lure some tenants from higher-cost metros. Challenges like older building stock will be addressed one building at a time; by 2027 we might see marquee examples of successful conversions (imagine one of the empty Penn Center office towers reborn as a residential or mixed complex). The suburban Philadelphia office market, which held up better, might stabilize around mid-teens vacancy as companies balancing hybrid needs keep some satellite offices. One particular segment to watch is life sciences: if funding in biotech rebounds in the next couple of years, Philadelphia is poised to ride that wave with ready lab space and a pipeline of startups. Those tenants require specialized offices (often lab/office hybrids) and have strong growth trajectories, which could significantly boost absorption in University City and beyond.

In conclusion, by 2026–2027 we expect the office market, both nationally and in Greater Philadelphia, to be on firmer footing – though likely not fully back to pre-2020 metrics. The workplace will have evolved, but importantly, it will still exist and even thrive in new ways. As the Deloitte 2025 outlook wisely counsels, investors should avoid merely trying to “buy the dip” and hope for a full reversion to old normalsdeloitte.com. Instead, focus on “next-generation” office assets – those that are smarter (tech-enabled), greener, and aligned with high-growth sectorsdeloitte.com. Adopt a long-term horizon: those who hold quality assets through this transition will likely see solid appreciation as the combination of post-pandemic recovery and limited new supply tightens the market. For embattled property types, remember that long-held assets often still have accumulated value – as noted, a 2019 purchase is on average 15% up by 2024 despite everythingdeloitte.com. This underscores that commercial real estate remains a game of cycles and durability.

Greater Philadelphia: Opportunities and Challenges for Investors

To summarize the case for office building investments now – with a spotlight on Greater Philadelphia – consider the following:

Opportunities:

• Cyclical Upside: We are at or near the bottom of the office cycle. History shows that investing during downturns can yield outsized returns during the recovery. With Philadelphia’s office occupancy just starting to tick up after years of declinesphillyofficespace.com, investors today can position themselves ahead of the recovery curve. As the market stabilizes and grows in 2025–2027naiop.org, property values should begin to rise from today’s discounted levels. Even a partial reversion of vacancy to normal levels (say Philly metro vacancy falling from ~20% to 15% over a few years) would significantly boost net incomes and valuations.

• Attractive Pricing and Yields: Office assets in Philadelphia trade at a fraction of replacement cost right now, and at higher cap rates relative to other property types. As an investor, that means higher current income if you pick stable assets, and greater upside if you buy vacancy at a discount and lease it up. For example, Class A suburban Philly office buildings with solid credit tenants can be acquired at cap rates in the 8–9% range today – a spread well above financing costs and far higher than multifamily or industrial yields. Such yield premiums compensate for perceived risk, but if the risk abates with improving market conditions, those cap rates could compress, handing investors capital gains. Additionally, Philadelphia’s rents (~$31/SF avg) are low on an absolute basisnmrk.imgix.net; there’s room for growth, especially in the highest-quality segment. Any investor who can add value (through renovations or aggressive leasing) can potentially capture significant rent upticks as demand returns.

• Value-Add and Conversion Potential: As discussed, Philadelphia has many older office buildings in prime locations that are under-used. This is fertile ground for value-add investors. With city support, one can convert some of these to residential or mixed-use, effectively arbitraging the value difference (multifamily properties in Philly often command higher values per square foot than aging offices). The example of 1701 Market’s conversionbisnow.com shows a path forward. Other buildings may just need a facelift and amenity upgrade to become competitive. For instance, a well-located 1980s building with 50% vacancy can be bought very cheaply; by investing in modern finishes and maybe a spec suite program, an investor can entice mid-sized tenants who are currently seeking quality but affordable space (remember that 60% of Philly CBD requirements are for 5k–25k SFnmrk.imgix.net, exactly the kind of tenants who would flock to a refreshed boutique building). This kind of active asset management – not just buying and holding, but repositioning – is likely to outperform in the coming yearsdeloitte.comdeloitte.com. Philadelphia’s market dynamics (lots of B-quality buildings in A-quality locations) make it ideal for these transformations.

• Stable Economic Base: Philadelphia’s economy provides a solid foundation for office demand. It is home to numerous Fortune 500 companies, major law firms, government agencies, and of course universities and hospitals. These entities are not abandoning the city. In fact, we’ve seen commitments like Chubb’s new 400,000 SF headquarters completed in 2022 – a long-term bet on Philadelphia. Education and health services, which form 40% of the region’s workforcenmrk.imgix.net, are inherently tied to physical locations – universities aren’t going remote, hospitals can’t operate virtually. This underpins a steady need for administrative offices, medical offices, and related facilities. Philadelphia’s status as a healthcare capital (Jefferson Health, Penn Medicine, etc.) means medical office buildings (MOBs) and research facilities will remain in high demand – and indeed, Philly MOBs are outperforming many other cities in occupancynmrk.imgix.net. For an investor, acquiring MOB portfolios or office buildings near hospital campuses can be a defensive, recession-resistant play.

• Life Sciences and Innovation Hub: The Greater Philadelphia area is sometimes dubbed “Cellicon Valley” for its cell and gene therapy leadership. The life sciences sector is a key growth driver that requires cutting-edge office/lab space. While tech firms can have people code from home, lab scientists need facilities. The expansion of life science companies (spurred by research at Penn, Drexel, Temple, etc.) is creating a new category of demand that didn’t exist at this scale a decade ago. Already, millions of square feet of lab-capable office space have been developed or are under construction (e.g. Schuylkill Yards, uCity Square). Investors can benefit by either investing in these specialized developments or by creating partnerships to retrofit portions of traditional offices for lab use where feasible. As the NAIOP sentiment suggests, trophy space in high-growth sectors will lead the recoverynaiop.org – for Philly, life science and healthcare offices are exactly that.

• Public-Private Initiatives and Revitalization: Philadelphia’s civic and business leaders are proactive in addressing the office market challenges. The city is exploring zoning flexibility, tax incentives, and infrastructure improvements (such as the plan to cap I-95 and create new parks, or expanding transit options) to make the urban core more attractive. There is a concerted effort to “build back better” downtown. Investors who engage with these initiatives – e.g., taking advantage of a new conversion subsidy or partnering in a public-private development – can both do well financially and help shape the city’s future. As CBRE notes, cities that invest in vibrancy and mixed-use appeal will fare bestcbre.comcbre.com. Philadelphia has a solid starting point with its historic charm, walkable Center City, and improving safety (crime rates have been trending down in 2023 after a spike in 2020–2021). By 2027, Center City could very well be a more residential, 24/7 neighborhood, which in turn supports higher office occupancy (as workers like being near where they live and play). Early investors in downtown assets could reap rewards as this urban renaissance plays out.

Challenges to Navigate:

• Short-Term Uncertainty: In the immediate next 12–18 months, there is still economic uncertainty (the possibility of a recession in 2024 has not entirely vanished). Office leasing decisions can lag economic shifts. Investors need to be prepared for a slow first phase of recovery – positive absorption might be modest quarter to quarter. Rent growth may also be negligible until vacancy drops substantially. So, underwriting should be conservative in the near term, with plenty of contingency for leasing costs and capital expenditures. Cash flow management is key: ensure properties have stable interim income (or set aside interest reserves) to weather any additional lean period before the uptick accelerates.

• Capital Market Constraints: Until interest rates ease, financing office acquisitions or renovations can be challenging. Lenders are cautious and often demanding more equity. Deals might require creative structuring (e.g., assumable debt, seller financing, or bridge loans from debt funds). Investors might partner with private equity or opportunity funds that have higher risk tolerance. Essentially, deal-making in offices requires extra diligence now – but for those who can structure it, the less competition for deals means potentially better pricing. As noted, global investment volume in real estate dropped to a decade low in 2023deloitte.com; however, there are signs that investors are re-focusing domestically and that transaction activity could rebound in 2025deloitte.com. Being ready to act quickly when capital loosens up (likely as soon as the Fed signals rate cuts) will distinguish successful investors.

• Structural Adjustments: Not every office asset will survive the evolution in work habits. Some buildings simply may never re-lease as offices. Investors have to be strategic in asset selection – location is paramount. In Philly, that means focusing on Center City West/Midtown (where tenants want to be near transit and amenities), University City, or well-populated suburbs with good highway and transit access. Assets in fringe or non-pedestrian locations will likely lag. Also, investors should factor in higher tenant improvement costs for new leases; tenants now demand build-outs that accommodate collaboration spaces and high-end finishes to entice employees in. Landlords might have to provide more flexible lease terms or expansion options. These dynamics slightly shift the risk profile – but adept owners will manage them by building strong relationships with tenants (creating a partnership approach to help tenants succeed with their space).

• Policy and Tax Environment: Philadelphia’s wage tax and business taxes are gradually improving but still relatively high. This could hamper some corporate expansions (some firms might choose a suburban location just outside city limits to save on taxes). However, the city is aware of this and has been phasing down the wage tax. Any investor in Philly should stay attuned to local policy changes – for example, a significant tax incentive for job creation could spur new demand, whereas any adverse changes could dampen it. The real estate community, through groups like PIDC and the Chamber of Commerce, is actively lobbying for policies to keep Philadelphia competitive. So far, the trajectory seems positive, with city officials signaling business-friendly approaches to post-pandemic recovery.

Bottom Line: For investors with a tolerance for complexity and a focus on long-term value, office properties – particularly in a diverse and stable market like Greater Philadelphia – warrant close consideration now. The sector is poised at an inflection point. Buying into offices today is admittedly contrarian, but as the adage goes, “buy low, sell high.” We have a convergence of factors that suggest the “low” is upon us: historically high vacancies that are starting to retreatnaiop.orgnaiop.org, discounted asset prices, minimal new supply, and a working world that has largely adapted to hybrid and is not likely to further abandon offices. Meanwhile, the upside drivers – economic growth, re-urbanization, and demand from growing sectors – are on the horizon for 2025–2027.

Greater Philadelphia offers a microcosm of these dynamics with perhaps slightly less volatility than coastal gateway cities. Its offices did not inflate as much, so their correction is more manageable, and its recovery could be steadier (if not as explosive as, say, some Sun Belt cities). Importantly, Philadelphia’s core strengths (education, medicine, affordability) position it well to capitalize on post-pandemic trends, such as the growth in healthcare employment and the decentralization of offices from pricier hubs.

As an investment-oriented recommendation: a barbell strategy could be effective – consider allocating capital to (1) high-quality, well-leased assets (or ones you can lease up quickly) in prime locations for stable income (Philadelphia offers many such opportunities at yields far above bond rates), and (2) a selection of underperforming assets that can be acquired cheaply and redeveloped or repositioned for substantial appreciation. The first provides immediate cash flow, the second provides capital growth potential. By 2026–2027, as the market recovery takes hold, both segments should be benefiting: the stabilized assets from tightening availability (possibly allowing rent increases) and the repositioned assets from newfound tenant interest or conversion success.

To sum up, the narrative around office real estate is evolving from doom to opportunity. Just as the retail sector had to reinvent itself last decade with the rise of e-commerce (and has emerged leaner and stronger in many cases)cbreim.com, the office sector is now undergoing its transformation. Those investors who engage with this transformation – rather than shy away – stand to reap significant rewards. In Greater Philadelphia, the pieces are in place for a revitalized office market that is more efficient, more mixed-use, and more attuned to modern work. The road will have challenges, but the long-term trajectory for well-chosen office investments remains positive, supported by the enduring need for places where people come together to work, collaborate, innovate, and build organizations. The next few years could very well mark the beginning of a renaissance for offices – and today’s investors have the chance to be part of that story, at historically attractive entry points.

Sources:

• Bluerock Market Insights (Sep 2022): Historical NCREIF returns and cycle analysisbluerock.combluerock.com

• Condor Capital (Jan 2024): Office vacancy historical peaks and WFH impactcondorcapital.comcondorcapital.com

• CEPR VoxEU (Apr 2021): Timeline of remote-work enabling technologiescepr.org

• Washington Post (Apr 2023): Evolution of office design and tech (open plan, cubicles, hoteling)washingtonpost.comwashingtonpost.com

• Richmond Fed “Econ Focus” (Q2 2023): Remote work persistence, REIT index decline, flight-to-quality datarichmondfed.orgrichmondfed.org

• CBRE Investment Management (July 2023): Impact of WFH on underutilization (2 billion sq ft), tenant survey resultscbreim.comcbreim.com

• CBRE Research “US Outlook 2025” (Nov 2024): Forecasts for peak vacancy ~19% in 2025, prime vacancy 8.2% by 2027, occupier expansionscbre.comcbre.com

• NAIOP Development Magazine (Spring 2025): Q4 2024 absorption +10.3 MSF (highest in 3 years), signs of stabilization and uneven recoverynaiop.orgnaiop.org

• Bisnow Philadelphia (July 2024): Center City vacancy tick down due to conversions (1701 Market), potential 2.5 MSF more conversionsbisnow.combisnow.com

• Newmark Greater Philadelphia Office Report (Q4 2024): Local vacancy and rent stats, positive absorption in Q4 2024, medical office figuresnmrk.imgix.netnmrk.imgix.net

• Philly Office Space/Wolf Commercial (Jan 2025): Philadelphia net absorption turned positive in 2024 (+615,000 SF) after 7.6 MSF space shed in 2019–2023phillyofficespace.comphillyofficespace.com

• Cresa Philadelphia (Nov 2023): Office projects under construction (3.7 MSF), resilience in trophy HQ and life science developmentcresa.com.