After a pandemic-fueled building boom, the Philadelphia region’s industrial market appears to have its highest vacancy rate in at least a decade, writes Paul Schwedelson for the Philadelphia Business Journal.
According to Colliers, vacancy has reached 8.6%. But local investors are still betting on Montgomery County’s smaller footprint properties.
Colliers Market Research Director Rose Penny says vacancy should “slowly come back down” as fewer massive warehouses hit the market. New supply is shrinking fast. Vacant space this quarter is estimated at 4.8 million square feet region-wide. Early 2026 projects less than 900,000 square feet.
Developers are now favoring small spaces, where tenant demand is strongest. Large buildings of 1 million square feet or more have vanished from local construction pipelines. Instead, 150,000-square-foot “sweet spot” properties are drawing the most interest.
Recent Montco transactions include Velocity Venture Partners’ $13 million purchase of a 112,421-square-foot building on Trooper Road in Norristown.
With e-commerce giants like Amazon scaling back, smaller, flexible buildings are proving to be better long-term investments. “We think flexibility makes them perform better in bull or bear markets,” said Greek Real Estate Partners’ David Greek.
Read more about the shift in industrial real estate in Montco and the surrounding regions in the Philadelphia Business Journal.
