What King of Prussia's 11.3% Vacancy Rate Means for Philadelphia Commercial Real Estate Brokers Right Now

King of Prussia District's newly released Upper Merion Township/King of Prussia Office Report puts the submarket's office inventory at 7.8 million square feet, with an 11.3% vacancy rate, the lowest among Greater Philadelphia's suburban office markets. Class A asking rent has climbed to $34.14 per square foot. An aerospace and defense cluster anchored by Lockheed Martin, Arcfield, Peraton, and KBR occupies roughly 600,000 square feet and supports more than 3,000 employees.

The report was written by King of Prussia District's own president, Eric Goldstein, which means the framing leans favorable, but the underlying numbers hold up against what's actually happening on the ground: Greystar just won approval to demolish a functionally obsolete office building at 720 Vandenburg Road and replace it with 205 apartments, because the office use no longer pencils there. Redevelopment here is removing the buildings nobody wants, so the ones left standing get more competitive.

For anyone brokering office space in this region, the real takeaway is that the market is bifurcating hard: Class A buildings with the aerospace and defense cluster nearby are commanding premium rent, while functionally obsolete buildings are getting torn down for apartments instead of re-leased. Know which side of that line your building sits on before you price it.