What started as big-name REITs dumping their office portfolios in the suburbs over recent years has now taken on a life of its own.

Demand for suburban office real estate is now eclipsing the sales activity in Center City, according to a Philadelphia Business Journal report by Natalie Kostelni.

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“The market is vibrant and there’s more velocity,” said Newmark Knight Frank investment broker Mike Margolis in the article.

And the eager buyers are being led by high-net-worth individuals, syndicators and some international funds. Among the most recent targets have been Conshohocken’s Three Tower Bridge, King of Prussia’s Triad, Fort Washington’s Apex, Devon Square and Exton’s Valley Creek Corporate Center.

“A good portion of the volume years ago had been real estate investment trusts selling portfolios,” said CBRE Investment Broker Robert Fahey.

“There hasn’t been any of that in 2017 and we’re already at half the volume that happened last year. People have more confidence in suburban assets because employment has pushed office occupancy up and rents are up.”

Other contributing factors are more stringent approval processes, which constrain supply, and further evidence that the millennial migration to the city has already peaked and is now retreating.

“Interest level has accelerated in the suburbs,” said Madison Apartment Group Executive Vice President Greg Curci. “Rent growth in well-located suburbs exceeds urban core areas.”

Read more about the rising demand for suburban office and apartment real estate in the Philadelphia Business Journal here.

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