The Center City multifamily market saw its vacancy rate more than double as new apartments have come online. In contrast, the suburban multifamily market continues to see its vacancy rates drop as additional product is delivered at a slower pace than downtown.
At midyear, the overall vacancy rate in Center City shot up to 3.4 percent from 1.6 percent compared with the same period last year, according to Delta Associates.
While the rate increased, it remains low overall. However, that will be closely watched as the supply of apartments increases by 2,548 units over the next three years, according to Delta’s calculation.
In Center City, some apartment projects are quicker to hit the market because they are conversions of existing buildings. In contrast, most of the new product in the suburbs is ground-up development which takes more time to go through the approval and construction process.
Rents run about $2.21 a square foot, which is an increase of 3.5 percent since 1988 and a 2.3 percent boost since 1998 but a 0.6 percent drop since last June.
In the western suburbs, the vacancy rate fell to 4.3 percent from 6.6 percent compared with the same period last year, according to Delta. The lowest rate at 3.6 percent can be found in Delaware and Chester counties. Overall rents are $1.43 a square foot, which is a 1.2 percent increase since 2008 and 1.5 percent rise since last year at this time.
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