Philadelphia’s small-bay industrial market retains strength despite climbing expenses

Philadelphia's industrial market demonstrated resilience in early 2025, maintaining strong tenant demand despite the national slowdown in leasing activity. Vacancy rates rose as new inventory hit the market, but net absorption, the net change in occupancy, increased year-over-year. Key submarkets such as Burlington, New Castle and Bucks counties continued driving the region’s leasing momentum. Industrial properties also hit a four-year streak as the top investment choice regionally, by dollar volume. Against this backdrop, here’s what CoStar is hearing from players in the Philadelphia industrial market in early 2025.