If you’re thinking about renting an office space in Philadelphia, then it’s important to understand how much that will cost. The short answer is that it varies based on factors like the building’s amenities and location. However, you can pretty much count on it averaging a little over $30 per square foot. There’s a little more to that figure though, and you can expect to pay a premium to rent space in buildings close to transportation hubs or arts and entertainment centers. This article will cover the commercial real estate market in Philadelphia, and it will explain how much it costs to rent office space in the City of Brotherly Love.
Businesses Attracted to Philadelphia at a Glance
Philadelphia is one of the most historic cities in the United States and a major East Coast business center. If you choose to move your business here, you’ll be in good company. For instance, the city has long been home to major insurance companies like Colonial Penn, Sigma and Independence Blue Cross. But its close proximity to leading universities and technical schools has attracted a more diverse business clientele in recent years.
Financial services companies still dominate the city’s central business districts, but renovated warehouses and manufacturing facilities in outlying neighborhoods have become popular locations for startup businesses in the technology and biotechnology sectors.
Even though Philadelphia is the sixth-largest metropolitan area in the US, it has a smaller feel to it than other big cities. Part of this essence can be attributed to its clearly defined, tight-knit neighborhoods. Additionally, rent in Philly is much cheaper than it is in other large cities.
What Kind of Office Space Is Available in Philadelphia, Pa?
Office buildings in the United States are generally classified as either Class A, Class B or Class C facilities, and there are plenty of each type in Philadelphia. More than half of the city’s 82.5 million square feet of office space are in Class A or A+ buildings in desirable locations with plenty of amenities. Class B buildings that are a little older but provide excellent value account for about 30% of the city’s office space, and Class C buildings that require major renovations provide about 2.5% of the offices available.
Rents increase along with building quality, but they average $30.52 per square foot for the city as a whole. If you are thinking of renting an office in Philadelphia, these are the choices you will have:
- Traditional office space: This kind of space has executive offices and conference rooms arranged around a large central area containing cubicles. There is usually a reception area, a mailroom and a room reserved for meal or rest breaks.
- Creative office space: While law and accounting firms prefer traditional office layouts, companies with a more bohemian outlook lean toward creative offices that feature open floor plans, high ceilings and collaborative spaces.
- Executive suites: Renting even a small office in a city as prestigious as Philadelphia can be expensive, so many startup or virtual companies choose to share their office spaces. Renting from a company like Corporate Suites allows entrepreneurs on a shoestring budget to use luxurious offices in prestigious buildings for a fraction of what they would normally pay, and there are no long-term contracts to sign.
What Is the Minimum and Maximum Amount of Office Space Available in Philadelphia, Pa?
The companies that rent offices in Philadelphia range from one-person operations to Fortune 500 companies with hundreds of workers, so there is an office for everyone. The smallest offices in the city are just 250 square feet, and the largest are more than a million square feet. Here is a more detailed breakdown:
- Smaller offices: About 7.5% of the available offices in Philadelphia are between 50,000 and 100,000 square feet.
- Medium-sized offices: Offices between 100,000 and 500,000 square feet account for about 32.5% of the commercial rental market in Philadelphia.
- Large offices: Offices of between 500,000 and 1 million square feet are the most common type of commercial property in Philadelphia and account for about 42.25% of the city’s total available office space.
- Extra-large offices: Philadelphia is home to several multinational corporations that rent offices of more than 1 million square feet. About 17.75% of the offices in the city fall into this category.
How Many Offices Are Available in Philadelphia, Pa?
The amount of office space available in Philadelphia constantly changes. Finding a suitable office can be difficult when the city is booming, but entrepreneurs may be spoiled for choice during economic downturns. Over the last few years, there has usually been between 500 and 750 offices listed for rent in Philadelphia, Pa.
What Other Property Types Are Available for Rent in Philadelphia, Pa?
Philadelphia has just about everything that a major city can offer, which means that its real estate market is incredibly diverse. In addition to offices, companies in the city can rent:
- Warehouses and distribution centers: Philadelphia is a major transportation hub, which has made it a popular destination for warehousing and distribution. This kind of space can usually be found near Philadelphia’s port, airport and major highways.
- Retail space: Philadelphia has a population of more than 1.5 million people, and the average income in the city is more than $50,000. This is why virtually all of the world’s major retailers have outlets in the city. Retail space in Philadelphia runs the gamut from boutique stores in historic districts to big-box outlets in the suburbs.
- Manufacturing facilities: While not known as a manufacturing center, Philadelphia does have some notable factories. One of the most famous is the Boeing Rotorcraft plant in Ridley Park.
How to Budget for a Retail Space
Most office leases are for at least five years, and they can be expensive to break. This can make choosing an office difficult for a startup company. Businesses that expand rapidly may find themselves stuck in offices that they have outgrown, but choosing a larger space could be a costly mistake if growth is slow. To help commercial tenants navigate the commercial real estate sector, landlords offer the following three types of leases:
- Full-service leases: With this type of arrangement, the tenant only pays the rent. Other costs, such as common charges, building maintenance, insurance and taxes, are paid by the landlord and factored into the monthly rent.
- Modified gross leases: A commercial lease becomes modified when certain costs are covered by the tenant. The most common bills paid by tenants are for utilities and janitorial services. Landlords still cover the costs of property taxes and insurance.
- Net leases: When a tenant signs a net lease, they pay a fixed amount to rent space plus taxes, taxes and insurance or taxes, insurance and maintenance costs. Tenants are also expected to take care of their utility bills.
A Better Alternative
Signing a five, 10 or even 15-year commercial lease can be daunting for entrepreneurs who are just starting out, which is why many of them choose to rent space from companies like Corporate Suites. This allows them to give their clients a prestigious business address in a desirable location without breaking the bank. The rent they pay includes conference and reception services, and they do not have to worry about buying furniture or artwork.
How Do I Rent Office Space in Philadelphia, Pa?
There are numerous websites that list commercial properties that are available to rent in Philadelphia. To help you narrow down your search, you can filter the results based on factors including location, the amount of space available, the year the building was completed and the asking rent. When you find a building that seems to be a good fit, put the address into an internet search engine to find out what kind of tenants you would be neighbors with if you moved in.
You can also look to Corporate Suites to find you the ideal private office rental. If a private office is not what you need, we can also help with co-working space and flexible accommodations. For example, if you are a solopreneur or a “gigger,” we can provide you with unique solutions, such as a virtual office.
The Corporate Suites location in Philadelphia is a classic granite and limestone tower on Broad Street near City Hall and the Avenue of the Arts, and it offers 24-hour access, a gorgeous lobby and high-speed elevators. The furnishings are top-notch, and broadband fiber connections make telecommunications lightning fast.
Getting Around Philadelphia, Pa
Philadelphia is a very old city, which means that some of its streets are quite narrow and congested. That is not something you will really have to worry about because the city has an excellent public transit system. The Southeastern Pennsylvania Transportation Authority operates rapid transit subway trains, trolleys and hybrid buses, and many routes run well into the early morning hours.
There are also several ways to reach Philadelphia from other parts of the country. The city’s 30th Street Station is a major Amtrak hub, and Philadelphia International Airport provides domestic and international air travelers access to the city. Major roads with exits in Philadelphia include Interstate 95, Interstate 295 and U.S. Route 1.
Frequently Asked Questions
Is Philadelphia considered an expensive city?
While office rents in Philadelphia are not as high as they are in New York or San Francisco, the city is still fairly expensive. However, it backs up its prices with world-class dining, shopping and entertainment.
How can I save money on office rent?
If you like what Philadelphia has to offer but would prefer to keep your costs down, you could rent space from Corporate Suites instead of a traditional commercial landlord. You will still get a prestigious address and excellent services, but you will not have to spend as much money.
What is the best commercial neighborhood in Philadelphia?
If you want to rub shoulders with Philadelphia’s business elite, look for space in a building near City Hall. This is where many politicians, corporate executives and entrepreneurs do business. Other good commercial space in Philadelphia includes the Avenue of the Arts on Broad Street, Center City and Old City.
Is it easy to break a commercial lease?
Only if you are willing to pay. Renting commercial space is a tough business, and landlords tend to write leases that are hard to break. This is one of the reasons that executive suites and coworking arrangements have become so popular.
What’s included in my lease?
Details in the leases for office space will vary, according to the plan and type of setup you choose. If you lease from Corporate Suites, we will work hard to make sure:
- That you are getting the best deal in Philadelphia
- Are very satisfied with your space and amenities
- That your bill doesn’t contain any hidden costs.
How much is the deposit?
Most landlords will ask for a deposit equal to one month’s rent.
Let’s Work Together!
Corporate Suites is one of the largest and most respected providers of shared serviced office space providers in Philadelphia. We know your business is unique, so we offer a wide range of flexible, custom office space solutions that are specifically designed to meet your business needs. To learn more about how we can help you grow your company in Philadelphia, call 212-512-0500 today. Alternatively, you can book a Corporate Suite tour of our office space online.