PHILADELPHIA, July 7 2008 — Retail properties in the Philadelphia market have performed well lately, but a soft economy will pressure property fundamentals in the months ahead by reducing consumer spending, thereby trimming demand for space, according to a second-quarter Retail Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm. Investment activity remains subdued, as buyers and seller are adjusting to the changing lending environment.
“Lenders will continue to make distinctions on assets’ credit quality and location, driving up cap rates for lesser investment-grade tenants,” says Spencer Yablon, director of corporate affairs in the Philadelphia office of Marcus & Millichap.
Following are some of the most significant aspects of the Philadelphia Retail Research Report:
Employers are forecast to add 3,000 jobs, a 0.1 percent increase.
Projects totaling 1.9 million square feet, or 1 percent of existing supply, are scheduled for delivery this year.
Vacancy is projected to end the year at 7.4 percent.
Asking rents are expected to rise 1.4 percent to $20.19 per square foot.
Effective rents will add 0.8 percent to $18.28 per square foot.
For a copy of the complete Philadelphia Retail Research Report, as well as reports on other markets nationwide, visit our website at www.MarcusMillichap.com.
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