Philadelphia, PA Industrial Market Report Q3 2026

Philadelphia industrial asking rent reached a record $11.94/SF in Q3 2026, up 2.5% year over year, while trailing-12-month completions fell 54% to 6.24 million square feet (SF). Vacancy tightened to 8.7%, 43 basis points lower than a year ago, as the metro absorbed 515,000 SF in Q3 versus negative 460K SF in Q3 2025. This Matthews™ Philadelphia, PA Industrial Market Report Q3 2026 covers demand, supply, pricing, and investment sales across 22 submarkets so owners, investors, and tenants can see where Philadelphia industrial real estate is tightest and where it is not.

Key Findings

• Demand rebounded: Philadelphia absorbed 515K SF in Q3 2026 and 7.59M SF over the trailing 12 months, versus -1.72M SF a year earlier.
• Vacancy is 8.7%, with Center City the tightest submarket at 0.4% and Salem County the loosest at 32.1%.
• Asking rent of $11.94/SF is a record, and Lower North Philly and Southwest Philly lead rent growth at +3.0% each.
• Supply is pulling back: Q3 deliveries were 918K SF, less than half of last year’s 3.14M SF, and annual deliveries peaked at 22.84M SF in 2023.
• Investors recorded $3.1B in Philadelphia industrial sales over the trailing 12 months (+46%), with pricing at a record $130/SF.

Philadelphia Industrial Supply & Demand Dynamics

How much industrial space is Philadelphia absorbing?

Philadelphia absorbed 515K SF in Q3 2026, against -460K SF in the same quarter last year. Trailing-12-month absorption of 7.59M SF compares with -1.72M SF a year earlier. Vacancy of 8.7% is 43 basis points tighter than Q3 2025, and asking rent has risen 2.5% year over year to a record $11.94/SF.

How much new industrial supply is under construction in Philadelphia?

Philadelphia delivered 918K SF in Q3 and 6.24M SF over the trailing 12 months, down 54% from the prior 12-month period. Space under construction equals 1.0% of inventory and is concentrated in West Philadelphia, where it represents 9.8% of existing stock. The 6.65M SF pipeline equals about three and a half quarters of absorption at the trailing pace, so new supply is limited relative to demand.

Philadelphia Industrial Investment Market

What are Philadelphia industrial cap rates and pricing?

Philadelphia industrial cap rates average 7.33%, down for six straight quarters and 39 basis points below the Q3 2018 high of 7.72%. Pricing sits at a record $130/SF, higher for 16 consecutive years. Sales volume reached $3.1B over the trailing 12 months, up 46% from the prior period, with $1.00B closing in Q3. Compressing cap rates and record pricing continue to support values.

Philadelphia Industrial Submarket Highlights

Vacancy is lowest in Center City (0.4%), Camden County (4.9%), Burlington (5.9%), and Chester and East Montgomery County (7.1% each). It is highest in Salem County (32.1%), Navy Yard (20.4%), Southwest Philly (14.4%), and South Philadelphia (14.2%). Rent growth is led by Lower North Philly and Southwest Philly (+3.0% each) and Delaware County (+2.9%), while Center City (-0.2%) and Navy Yard (-1.1%) posted declines.

Philadelphia Industrial Market by the Numbers

• Vacancy: 8.7%
• Average asking rent: $11.94/SF (+2.5% year over year)
• Q3 2026 net absorption: 515K SF
• Trailing-12-month deliveries: 6.24M SF
• Under construction: 1.0% of inventory (6.65M SF)
• Trailing-12-month sales volume: $3.1B (+46%)
• Average cap rate: 7.33%
• Price per SF: $130

Philadelphia Industrial Market FAQs

What is the Philadelphia industrial vacancy rate in Q3 2026?

The Philadelphia industrial vacancy rate is 8.7% in Q3 2026, down 43 basis points from Q3 2025.

What is the average industrial rent in Philadelphia?

Average asking rent in Philadelphia is $11.94/SF in Q3 2026, a record and 2.5% higher than a year ago.

Which Philadelphia submarket has the lowest industrial vacancy?

Center City has the lowest industrial vacancy at 0.4%, followed by Camden County at 4.9%.

What is the average industrial cap rate in Philadelphia?

The average Philadelphia industrial cap rate is 7.33% in Q3 2026, down for six consecutive quarters.

Previous Philadelphia Industrial Market Reports

Compare this quarter with the prior one: read the Philadelphia, PA Industrial Market Report Q2 2026.

The bottom line for owners: record rents, record pricing, and falling completions favor sellers in tight submarkets, while high vacancy in Salem County, Navy Yard, and Southwest Philly means tenants there still hold leverage. Download the full report above for submarket charts and detail, or contact David Loving, Associate Market Leader in Philadelphia, to discuss your property.

Sources: Matthews™ Research, CoStar Group, Inc., RCA, and BLS. Information is for reference only. Sources deemed reliable but not verified.