As new innovation spaces continue to come online in University City, office rent prices in the neighborhood are skyrocketing.

According to CBRE’s Tech-30 report, released Tuesday, University City saw an 8% increase in average office rent from the second quarter of 2021 to the second quarter of 2023. That was the 10th largest increase among top tech submarkets in the nation and the largest hike among markets in the Northeast and Mid-Atlantic over the past two years. Since 2011, the average rental rates for office space in University City has jumped 47%, the fifth largest increase nationwide among top tech submarkets during that timeframe.

CBRE defines a tech submarket as a neighborhood within a larger real estate market, often situated near universities.

Compared with the Philadelphia office market as a whole, office rents in University City represent on average a 32% premium. That’s three times the premium of tech submarkets nationally, where they average 10.2% over their markets as a whole.

University City rent averages $47.34 per square foot, whereas the entire Philadelphia market is $32.14 per square foot.

Despite rising costs, it’s not deterring tenants. There is a 13.8% vacancy rate in University City, a figure considerably lower than the 23.3% vacancy rate in the entirety of Philadelphia office space, according to CBRE.

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