So in 2021, more than $94 million was refunded to employees of companies working remotely in suburban Philadelphia. In 2022, an additional $85 million was refunded to these employees from the city’s wage tax.
In 2019, it was not unusual for West Market Street and JFK Boulevard to see an average of more than 50,000 nonresident workers, or commuters, each weekday. office district, according to data compiled by the Center City District. In 2020, the number of commuters in the business district that stretches from City Hall to the Schuylkill River was reduced to less than 5,000, he said. In 2023, about 30,000 such commuters will be working in office buildings west of City Hall, according to the data.
The average professional services business pays tens of thousands of dollars each year, and often more, not including utilities, to rent thousands of square feet of office space in Philadelphia’s Center City.
For generations, there has been a notion that there is value in co-workers commuting as individuals and working directly next to each other.
However, after the COVID-19 pandemic forced many office workers into remote work situations and transitioned to hybrid office hours, many people are no longer using the standard multi-tenant practices that exist in many offices. I have doubts about the value of retail office buildings. Old cities like Philadelphia.
For example, there is a Class B office building along Walnut Street. Built in the early 1900s, it features an elevator that takes visitors up and down his 16th floor. The top floor is not an office space, but apartment space, according to city records.
Of the remaining 15 floors, the property has 77,000 square feet of office space available, according to marketing materials. There is 15,587 square feet of office space available for lease on four different floors, each ranging from 2,000 square feet to 4,300 square feet.
For about 2,000 square feet of office space on the 12th floor, brokers are looking to lease it for at least one year, if not a five-year lease, for at least $23 per square foot.
One of the open offices was once leased by Red Bull Mid-Atlantic Region as its Philadelphia office hub, the brokerage boasted in marketing materials.
On a recent Saturday, the entire page of visitors to this facility shown on the sign-in sheet at the security desk were visitors to the emergency dental clinic on the 6th floor.
But until the multi-floor offices are rented, those spaces will remain empty 24/7, not just on weekends.
That doesn’t mean offices don’t still need cleaning services, security guards, basic utilities and other maintenance, in fact they do, but they now have less income to pay for them.
Buildings of this size, scope, and location have already been renovated for technology companies with smaller office spaces rather than 10,000 square feet of expansive open space.
There are other office buildings that are in even lower demand, but in cities like Philadelphia, owners willing to commit capital to renovate historic properties or as long-term investments will need even more capital.
Beyond that, the 1,300-square-foot ground-floor retail space next door was apparently used for breakfast and lunch for office workers years ago, but has not yet been rented and remains vacant. is.
It’s not like we haven’t had difficult times before.