34 — July 2026 — Southeastern Pennsylvania — M id A tlantic Real Estate Journal
www.marej.com
S outheastern P ennsylvania Reduced deliveries, moderating vacancy and port-related demand shape the market outlook Marcus & Millichap publishes Midyear 2026 Philadelphia Industrial Outlook
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back, vacancy is expected to ease and the metro’s East Coast location continues to matter for tenants moving goods across the region.” Key findings include: • Deliveries are forecast to to - tal 3.2 million s/f in 2026, fall- ing to less than one-quarter of last year’s volume and roughly one-third of the metro’s prior 10-year annual average. • After expanding by more than 500 basis points over the past four years, metro- wide vacancy is projected to decline slightly to 9.2 percent by year-end. • Average asking rent is ex -
pected to rise 1.7 percent to $10.36 psf after declining 6.5 percent in 2025, ranking Philadelphia ninth among major metros for rent growth. • Demand strength is expected to remain more pronounced in outer-edge submarkets, while some urban-core areas continue to work through older space and prior move-outs. • Additional cold storage capac - ity at the Port of Philadelphia is expected to strengthen the metro’s refrigerated logistics position, supporting industrial demand from temperature- sensitive distribution users. Marcus & Millichap ranked
Philadelphia 19th in its 2026 National Industrial Index, which evaluates 36 major industrial markets based on projected employment growth, vacancy trends, construction activity, retail sales and house- hold growth. While market per- formance is expected to vary by submarket, the combination of slowing deliveries, improving occupancy fundamentals and continued logistics demand is expected to support the metro’s industrial sector throughout the remainder of the year. The Philadelphia market is also operating within a broader national industrial
environment marked by shift- ing supply-demand dynamics. According to Marcus & Millic- hap’s 2026 Midyear Industrial Investment Outlook, indus- trial vacancy rates have risen nationally over the past three years, largely due to elevated development activity in select markets. However, construc- tion starts have slowed consid- erably, and many metros are now benefiting from a reduc - tion in new supply pressure, creating conditions that may support stronger occupancy trends over time. Philadel - phia’s projected decline in vacancy reflects this broader transition as developers pull back from the rapid pace of con- struction seen in recent years. Nationally, tenants continue to favor newer, modern facilities that can accommodate evolv- ing logistics and operational requirements. Marcus & Milli- chap notes that high-credit ten- ants are increasingly migrating from older industrial buildings into recently constructed space, while demand for smaller fa- cilities serving last-mile dis- tribution functions remains steady. This trend is expected to continue throughout 2026 as occupiers prioritize efficiency, technology integration and proximity to consumers. The report also points to ongoing changes in supply chain strategy that continue to influence industrial real estate demand. Companies are in - creasingly seeking greater con- trol over distribution networks and inventory management, while some manufacturers are evaluating opportunities to shorten supply chains through domestic production. These trends have helped sustain industrial leasing activity de- spite broader economic uncer- tainty and shifting trade poli- cies. Marcus & Millichap notes that manufacturing-related demand is expected to remain an area of interest for inves- tors as onshoring initiatives, automation investments and supply chain resiliency strate- gies continue to gain traction. Philadelphia’s strategic lo - cation along the East Coast distribution corridor remains a key competitive advantage. The metro’s proximity to major population centers, interstate highway networks, rail infra- structure and port facilities po- sitions it to benefit from long- term logistics demand. The continued on page 35
HILADELPHIA, PA — Marcus & Milli- chap has published
its 2026 Philadelphia Industrial Investment M i d y e a r Outlook. “Philadel - phia is get- ting some relief from
Tim Stephenson
the supply pressure that has shaped the market over the past several years,” said Tim Stephenson , managing direc- tor, market leader, Philadel - phia. “The pipeline is pulling
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