February 2026
Quarterly Market Update Q1
2026
Section 1:
Center City District boundaries
Section 2: West Market office district
Center City District Boundaries
3 Key
Takeaways
Expansions continue to absorb high-quality space Trophy vacancy continues to tighten as a result
Current office occupancy 78.2%
Steady since last quarter
Major employers are taking note of talent Center City's role as young talent aggregator driving activity
The amount of office space leased within CCD boundaries in 2025 was up nearly 10% compared to 2024. Total office vacancy is hovering at 21.8%. Employee volumes within CCD boundaries during typical office hours are around 68% of pre-pandemic levels.
Quarterly Leasing Volume by Class
2025 closed with a notable increase in Trophy-class office leasing volume, more than doubling activity from the prior two quarters combined. While the flight to quality continued, Class B leasing also saw a meaningful uptick, highlighted by Community Legal Services’ sizable December lease at 123 South Broad Street. Source: CoStar
Leasing Activity by Quarter (Direct/Sublease)
Q4 2025 marked the second consecutive quarter of elevated subleasing activity, driven by large transactions from Wolters Kluwer at One Commerce Square and Bonduelle at 2400 Market Street.
Source: CoStar
Notable Deals (Q4 2025
– Q1 2026)
Community Legal Services
123 S. Broad Street
Community Legal Services has signed a new lease at 123 S. Broad Street after three decades at 1424 Chestnut Street. The organization will occupy part of the 5th floor and the entire 4th floor, representing the largest lease secured at 123 S. Broad since the building completed its major 2022 renovations.
Bonduelle Group
2400 Market Street
Bonduelle, a France-based processed food company, has subleased part of the 4th floor at 2400 Market Street, taking space previously occupied by Audacy.
Notable Deals (Q4 2025 – Q1 2026)
McEldrew Purtell
1845 Walnut Street
Personal injury law firm
McEldrew Purtell has signed a lease to relocate from 123 S. Broad Street to 1845 Walnut Street, more than doubling its previous footprint to 17,328 square feet as it prepares for continued growth.
Athena Global Advisors
Three Logan Square Communications firm
Ceisler Media was recently absorbed by Athena Global Advisors, who will be doubling its office footprint as it relocates from 30 S. 15th Street to Three Logan Square at 1717 Arch Street.
Vacancy by Class
Class A vacancy rates remained relatively stable throughout 2025. By the end of 2026, however, the effects of the ongoing flight-to-quality trend became more pronounced, with Class B vacancies reaching a year-high of 19.3% while Trophy-class vacancies fell to a year-low of 11.6% following a busy Q4 2025.
Source: CoStar
Net Absorption by Class
Trophy-class buildings recorded their strongest positive absorption in more than a year. In contrast, Class A and Class B buildings gave back some of the gains achieved in Q3 2025, with Class B vacancy rising as the year came to a close.
Source: CoStar
Return to Office
CCD Boundaries – Weekdays 8 a.m.-6 p.m.
Across CCD’s boundaries, inbound commuter activity was largely stable year-over-year through the final months of 2025. Commuting rates dropped in January due to the combined effects of the holiday period, ongoing SEPTA regional rail and trolley disruptions, and a major winter storm that made commuting difficult for an extended stretch.
Methodology note: These data are provided by Placer.ai using anonymized samples of cell phone locations. A recent change by Placer.ai in its categorization of what constitutes a visitor and an employee have resulted in employee volumes decreasing and visitor volumes increasing as the platform more accurately determines who is traveling regularly for employment.
Source: Placer.ai
CCD boundaries – Conversions
The Wanamaker Building
Under construction
2028 completion
Newly announced details have confirmed that 622 apartment units will be built out across six floors of the Wanamaker Building. This will remove approximately 600,000 square feet of supply from the office inventory. The project is expected to be completed in 2028.
Hahnemann Campus
Proposed
Details TBD Despite a proposal to rezone the former hospital campus to forbid housing, a total of 824 units have been proposed by multiple entities including Dwight City Group and Brandywine Realty Trust. Redevelopment would not directly affect office inventory but could serve to increase the area's foot traffic and overall marketability.
West Market Office District
West Market Office District – Recent Retail Leasing
Cake and Joe
1735 Market
1,200 s.f.
This will be the third location for South Philadelphia-founded Cake and Joe, which operates in Pennsport and Fishtown. This brings a much-needed coffee and food offering to the primary office corridor.
MOTW Coffee & Pastries
2101 Market
3,000 s.f.
MOTW Coffee & Pastries will be moving into the former American Heritage Credit Union space on the ground floor of 2101 Market Street.
Rhythm & Spirits
1617 JFK
3,500 s.f.
Rhythm & Spirits has opened a restaurant and bar within One Penn Center, serving residents, workers, and commuters.
Revolution Taco Express, Pagano's, Mac Mart
Comcast Concourse
TBD
As workers have returned to the Comcast Campus, the Concourse is undergoing a refresh with new dining options on the way.
West Market Office District – Conversions
Ten Penn Center Proposed
169,000 s.f.
1801 Market Street was acquired by PMC Property Group for $30 million in summer 2025. The project continues PMC’s recent trend of office-to-residential conversions, with floors 17–23 slated to become 273 new apartments. The redevelopment will join 17 Market West as a new residential offering along Market Street.
1880 JFK Boulevard Proposed
50,644 s.f. ASI Management, the owner of 1880 JFK Boulevard, has proposed converting the top four floors (17–20) into 45 apartment units.
West Market Office District
Employee Recovery – 2024-25 Average
Across CCD’s boundaries, inbound commuter activity rose modestly in December but declined again in January. December 2025 reached 57% of 2019 levels, while January fell sharply to 48% due to the combined effects of the holiday period, weather, and ongoing SEPTA disruptions.
Methodology note: These data are provided by Placer.ai using anonymized samples of cell phone locations. A recent change by Placer.ai in its categorization of what constitutes a visitor and an employee have resulted in employee volumes decreasing and visitor volumes increasing as the platform more accurately determines who is traveling regularly for employment.
Source: Placer.ai
2024-25 2025-26