Press Release (ePRNews.com) - Philadelphia, Pennsylvania - Aug 03, 2017 - The Philadelphia Central Business District (CBD) generated interest and new retail real estate leases during the past three months, according to Cushman & Wakefield’s second-quarter Philadelphia CBD Retail MarketBeat report for the city. The commercial real estate services firm’s Philadelphia research team projects retail real estate expansion will help drive continued sales growth into 2018.
“The second quarter saw healthy activity in retail real estate as the economy continued the growth trend that the Philadelphia Metropolitan Area (MSA) has enjoyed since mid-2016,” said Cushman & Wakefield Research Manager Jared Jacobs. He noted that overall retails sales grew since mid-2016 at more than twice the pace they grew during the previous 12-month period. “Unemployment declined to 4.6 percent, down 50 basis points from a year ago as total non-farm employment for all of Philadelphia grew by 1.5 percent. This has helped produce year-over-year total retail sales growth of 5.9 percent.”
Prime rental rates declined during the first half of this year, ending the second quarter at $125 per square foot on Walnut Street – the city’s highest retail rent district – and to $75 per square foot along Chestnut Street. In both cases, rental rates have declined by $10 a square foot since year-end 2016.
Small-to midsized-deals provided activity during the first and second quarters. Eternity Fashions opened two locations during the first half of this year: At 1702 Walnut St. the company moved into 6,000 square feet spread over three floors while also occupying 3,000 square feet at 1408-1410 Chestnut Street. Warby Parker opened a 2,360-square-foot eyewear store at 1523 Walnut St. while Red Wing Shoes signed a 2,900 square-foot lease at 1505 Walnut St. and will open in the third quarter.
There has been significant new activity throughout other areas of the downtown market, particularly in the East of Broad submarket. At the East Market development, City Fitness announced this quarter that it will open a 27,000-square-foot location in early 2018. Iron Hill Brewery and Wawa also have announced plans to open stores of 8,450 and 6,200 square feet, respectively. Target remains active, announcing plans to open additional locations during the second half of 2018, including a 47,000-square-foot store in Northern Liberties at the corner of Spring Garden and 6th Streets, and a 36,000-square-foot store in South Philadelphia at the corner of Washington Avenue and Broad Street.
The MarketBeat report anticipates that expansion of the downtown retail real estate market, especially at East Market and Fashion Outlets of Philadelphia in the East of Broad submarket, will drive increased retail sales throughout the city. The report anticipates that retail sales will expand another 3.1 percent by year-end 2017 and another 5.9 percent by mid-year 2018.
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