I am pleased to report that the King of Prussia commercial office market appears to remain strong. According to our analysis of CoStar data, Class A vacancy at the end of Q4 2018 is 10.2%, down from 19.2% in Q4 2008. The average lease rate remains near the 10-year high of $29.42 PSF (Q3 2018).
 
Class B, with a 18.7% vacancy rate, is nearly 11 points below the 10-year high of 29.5% (Q2 2014). The average lease rate for Class B commercial space is $22.87 PSF.
 
The biggest drop in vacancy rate is reserved for Class C commercial space. While this small inventory can fluctuate greatly from quarter to quarter, it remained in the double digits for most of the last decade. The current vacancy rate of 1.1% is down from a 10-year high of 32% (Q4 2011). The average lease rate remains consistent at $16.18 PSF. The continued performance of all classes in commercial office space keeps the aggregate vacancy rate at 12.3%, which is 10 points lower than the 10-year high of 22.3%. (Q3 2012). The average lease rate remains strong at $24.88 PSF (Q4 2018).
 
This past year provided the lowest average vacancy rate over a 10-year period for industrial space. Hovering around 1.5% for all of 2018, this was the best year out of a strong market that reached a high of 7% vacancy at the beginning of 2013. The average lease rate for 2018 was also the highest in the 10-year period at $7.33 NNN. The KOP flex space market didn't perform as well, with vacancy rates increasing to 4.1%, but average lease rates stayed relatively strong at $14.76 NNN. Overall, these numbers are incredibly strong, considering that KOP has more than 6M SF of commercial office space and 11M SF of industrial/flex space, the largest concentration of both categories in the suburban Philadelphia region.
 

 

 
 
Business in the Spotlight: Quench
Recently relocated to a larger space in King of Prussia, Quench continues to grow
Quench offers "Water-as-a-Service" solutions to their customers with a variety of water filtration products. These adaptable systems can provide clean beverages while saving the host company time and money without the negative environmental impact of standard plastic jug delivery.
 
After moving the company headquarters to 630 Allendale Road in 2018, Quench acquired several competing water delivery services across the country to expand sales channels. These acquisitions have grown the number of leased systems to over 140,000 units across North America serving over 50,000 client companies.
 
Quench USA, Inc. merged with AquaVenture Holdings in 2014 to create a larger water purification platform. AquaVenture Holdings original subsidiary, Seven Seas Water, provides water management solutions include waste water treatment facilities and de-salination plants to governments and industrial clients while Quench handles the distribution of clean water systems that directly serve the individual.


630 Allendale Road | quenchwater.com



In the News 
 
King of Prussia-Based Water-Cooler Maker Buys Illinois Firm for $58M
The Philadelphia Inquirer
Quench, a unit of the King of Prussia-based water-cooler, sparkling-water and coffee-machine aggregator AquaVenture Holdings Ltd., says it has purchased the filtered water-cooler provider Pure Health Solutions Inc. and its Pure Water Technology business, based in Lincolnshire, Ill., from the private-equity investor ClearLight Partners for $57.6 million.  Read More...

Qlik merger feeds 'Data Revolution,' new KOP HQ
The Philadelphia Inquirer
Qlik, a business-data-analytics and -management company owned by Chicago tech buyout firm Thoma Bravo LLC, employs 2,000 engineers, sales, and support people - but nobody went to work at its Radnor headquarters last week.  Read More...

Marijuana company Curaleaf, valued at $4 billion, has big plans with Penn Medicine for King of Prussia
The Philadelphia Inquirer
Curaleaf, a U.S. marijuana company valued Monday at $4 billion, has big plans for the Keystone State.   Read More...
 
Berks design-build firm expands with opening of King of Prussia office 
Berks Biz
A Berks County design-build firm said plans to open an office in King of Prussia in several weeks to capitalize on its growing Philadelphia-area client base Read More...  


Commercial RE Transactions
   
SALES
 
BENDERSON DEVELOPMENT
250 MALL BOULEVARD
$10.94M | 63,000
 
MERION INNOVATION III LLC
411 SWEDELAND ROAD
$52.7M | 1.1M SF
 
BORO LINE ROAD PARTNERS LLC
165 BORO LINE ROAD
$2.1M | 30,520 SF
 
 
LEASING
 
840 FIRST AVENUE
16,329 SF
 
780 5TH AVENUE
11,620 SF
 
620 FREEDOM BUSINESS CENTER DRIVE
10,106 SF
 
1150 FIRST AVENUE
4,124 SF
 
1019 WEST 9TH AVENUE
4,003 SF
 
1019 WEST 9TH AVENUE
2,535 SF
 
1019 WEST 9TH AVENUE
2,098 SF
 
901 EAST 8TH AVENUE
1,811 SF
 
 
 

601 SOUTH HENDERSON ROAD
1,244 SF

555 CROTON ROAD
1,004 SF

SMILE DIRECT
KOP TOWN CENTER
1,850 SF

KATE SPADE NEW YORK
KING OF PRUSSIA MALL
1,753 SF

FOR EYES
KING OF PRUSSIA MALL
1,432 SF
 
PINK'S HOTDOGS
KING OF PRUSSIA MALL
481 SF
 
CALIFORNIA TORTILLA
KING OF PRUSSIA MALL
1,563 SF
 
CHARLES P. ROGERS
KING OF PRUSSIA MALL
1,359 SF
 
BARTACO
KING OF PRUSSIA MALL
5,331 SF

*
COMMERCIAL OFFICE
RETAIL
Not a complete listing.
Retail leases submitted to KOP-BID for Q4 2018, as of 1.9.19.
All other sales and leasing info from CoStar.



King of Prussia District (KOP-BID) is a 501(c)(3) not-for-profit, special 
 services organization. KOP-BID engages public and private partners to 
 collaboratively improve the economic environment in King of Prussia 
 by making it more vibrant, attractive and prosperous.

Learn more at visitKOP.com



DISCLAIMER: All information obtained using CoStar Analytics and field checked for accuracy by 
KOP-BID. 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.
KOP-BID uses "Direct % Vacant Available" in its vacancy rate reporting. All industrial and flex statistics are NNN.



234 Mall Boulevard, Suite 150, King of Prussia PA 19406 
484.681.9452 | Info@kopbid.com
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