Q3 2020 Summary
Commercial property in King of Prussia remains buoyant in a turbulent market. While the Philadelphia-area commercial vacancy rate lingers near a 20-year low, Adrian Ponsen, Director of Market Analytics for CoStar’s Philly region, points out that new leasing has dropped significantly during the pandemic.

"..Philadelphia's new leasing volume is currently severely depressed. Even as nonessential business closures eased in the mid-summer months, the square footage of new leases signed was still down almost 70% compared to seasonal averages during the previous three years.

…Life sciences firms have proven the exception to the rule and continue to expand. WuXi Biologics' decision in May to lease 33,000 SF at MLP Venture's ongoing redevelopment of the former GlaxoSmithKline Upper Merion campus into the Discovery Labs was a win for the suburbs.” CoStar’s Philadelphia – PA Office Market Report, 10-20-2020

King of Prussia is poised to take advantage of this opportunity as companies will be more selective when looking for new space to expand, especially bio-pharma companies needing state-of-the-art lab space.

Renovated spaces and extracted office space from Discovery Labs R&D flex inventory increased the amount of available Class A commercial office in King of Prussia by 387,555 SF. This increase in available supply and several building class adjustments in commercial office properties that we monitor explain the 5.3-point increase in vacancy rate from last quarter to 14.7%. The vacancy rate for office properties previously monitored by King of Prussia District over previous quarters only increased by 1.5 points to 10.9%. Class A space accounts for 70% of the commercial office inventory in King of Prussia and Class A vacancy rate is at 14.9%. Despite an increase in office supply, CoStar reports an increase in the average aggregate lease rate by $4.46 to $32.81 PSF with a corresponding increase in the average Class A lease rate to $37.88 PSF.

Class B office space remained steady with a 12.6% vacancy rate and an average lease rate of $22.49 PSF while Class C office space fluctuated dramatically by more than 17 points due to very low inventory. Class C space finished Q3 with a 23.7% vacancy rate with the bulk of available space coming from one property. The average lease rate for Class C space remained steady at $26.07 PSF.

Inventory for Flex and Industrial space remained the same as previous quarters but vacancy rates continue to lower in both categories. Flex space dropped by less than a point to 18.8% vacancy rate while Industrial space continued to outperform with a 0.2% vacancy rate. The average lease rate for Flex space increased by more than $4.00 from the previous quarter to $33.68/NNN, an all-time high. Industrial space remained the same as last quarter with an average lease rate of $9.11/NNN.

Eric T. Goldstein
Executive Director
King of Prussia District
PROTECS’ Innovation Center III Expands in Renaissance Park
PROTECS Inc., a project development and construction management firm specializing in life science and tech facilities, is expanding its Innovation Center in King of Prussia’s Renaissance Park. Innovation Center III at 3700 Horizon Drive is 21,800 SF of multi-tenant space that will grow to almost 100,000 SF of R&D laboratories, office space, chemistry labs and cleanroom space that will include shared conference rooms, lobbies and other shared amenities.

The expanded lab facility on Horizon Drive follows the growing collaborative environment of life science companies in Renaissance Park that includes GlaxoSmithKline, WuXi Biologics, Center for Breakthrough Medicine, Testing Centers of America, CHOP and Jefferson Health. This developing life science district, coupled with biotech and pharmaceutical companies in Moore Park or Continental Drive like CSL Behring and Nabriva Therapeutics, will strengthen King of Prussia’s position in the biopharma industry.
Commercial RE Transactions

346 East Church LLC
340 E. Church Rd.

480 American Avenue Partners LLC
480 American Ave.

590 West DeKalb Pike LLC
590 W. DeKalb Pk.


143-145 S. Gulph Rd.
18,500 SF

1150 First Ave.
11,582 SF

421 Feheley Dr.
10,125 SF

307 E. Church Rd.
9,000 SF

357 S. Gulph Rd.
4,205 SF

640 Freedom Business Center Dr.
2,281 SF

550 American Ave.
2,003 SF

600 W. DeKalb Pk.
1,560 SF

491 Allendale Rd.
1,171 SF

550 American Ave.
1,000 SF

Sola Salon
KOP Mall
6,245 SF

KOP Mall
5,672 SF

Moose Knuckles
KOP Mall
2,000 SF

Sally Beauty
KOP Mall
1,987 SF

KOP Mall
946 SF

KOP Mall
700 SF

Warped Reality Tattoo
180 Town Center Road
1,900 SF

197C E DeKalb Pk.
11,500 SF

* Commercial Office
* Retail

Not a complete listing.
Retail leases submitted to King of Prussia District for Q1 and Q2 2020, as of 7/13/20. All other sales and leasing info from CoStar.
King of Prussia District is a 501(c)(3) not-for-profit, special services organization.
King of Prussia District engages public and private partners to collaboratively
improve the economic environment in King of Prussia by making it more vibrant,
attractive and prosperous.

DISCLAIMER: All information obtained using CoStar Analytics and field checked for accuracy by King of Prussia District. Vacancy rates are calculated using existing, non-owner occupied commercial buildings in Upper Merion Township only, over 10,000 SF, Class A, B, and C plus retail, industrial and flex. King of Prussia District uses "Direct % Vacant Available" in its vacancy reporting. All industrial and flex statistics are NNN.
234 Mall Boulevard, Suite 150, King of Prussia, PA 19406
484.681.9452 |
© 2020 King of Prussia District. All rights reserved.