Blog Post: Rethinking Office Life: Philly’s CRE Leaders Share What’s Driving Change

Five Below, HQ, LIts Building, Philadelphia, PA

April 15, 2025, Philadelphia, PA

Last week, Bisnow brought together some of the region’s top real estate minds for its State of the Philadelphia Office Market event—hosted at the dynamic Five Below headquarters inside the historic Lits Building on East Market Street. With a packed house and lively discussion, it was clear that while the office sector continues to face headwinds, there’s also a clear sense of renewed energy and strategic optimism in the air.

Panel 1: The Modern Workplace

The first panel focused on the modern workplace, exploring trends in layout, design, and amenities. Panelists included Chris Buccini, Co-President of The Buccini/Pollin Group; Rebecca Nuver, Director of Development at Parkway Corporation; and Colin Rooney, Assistant General Manager at Industrious. The discussion, moderated by Ethan Genyk of Jacobs, highlighted how office environments are being reimagined to support hybrid work, attract talent, and meet new tenant demands.

Navigating a Shifting Landscape

The day opened with a conversation about the macroeconomic realities shaping the market—namely, persistent high interest rates and tight capital availability. Chris Buccini of The Buccini/Pollin Group set the tone, acknowledging that while financing remains a challenge, the demand for high-quality office space remains resilient.

“People will pay for better space—especially if it helps attract and retain top talent,” Buccini noted. In today’s competitive job market, the workplace has become a recruitment tool, not just a place to work.

The Modern Workplace: Amenities That Matter

Rebecca Nuver of Parkway Corporation shared how tenants—especially those with large employee bases—are redefining what "Class A" means. She’s seeing requests for fully staffed kitchens, barista bars, and hospitality-level service, particularly in owner-occupied buildings, which have more leverage and autonomy. She also emphasized the importance of comfortable, intimate spaces that allow employees to feel at home.

Colin Rooney of Industrious echoed those sentiments, describing a shift toward hospitality-driven flex space. “People crave belonging. Our teams are trained more like hotel concierges,” he said. Community, wellness, and personalization are now driving tenant engagement and return-to-office momentum.

Panelists noted that tenants are increasingly requesting common amenities that focus on speed, simplicity, and customization. The emphasis is on plug-and-play spaces that are flexible and serve multiple functions—catering to the diverse needs of today’s workforce. With Gen Z entering the workplace, there’s a growing priority on creating environments where younger employees can learn from more senior staff.

And that return is happening. Across the board, panelists reported strong in-office presence on Tuesdays through Thursdays, with hybrid models here to stay. Creative layouts, collaborative zones, and experience-driven amenities are all being used to reimagine traditional office environments. Buccini noted that the goal is to create a space where “it is a joy for people to come to work.”

How Are Office Owners Differentiating?

Rebecca Nuver also highlighted that office owners are increasingly exploring life science conversions, anticipating continued demand for Class A space. However, in a market with significant vacancies in older buildings, standing out and differentiating has become more challenging.

With an abundance of outdated inventory—often featuring windowless cores and inflexible layouts—developers are getting creative with redevelopment and adaptive reuse. Buccini mentioned they’re “knocking down everything they can” and repositioning sites to meet modern demands.

Panel 2: Market Dynamics, Demand Drivers, and the Road Ahead

A second panel, moderated by Brad Molotsky of Duane Morris LLP, examined current market dynamics, including leasing activity, pricing, and shifting tenant priorities. Panelists—Keith Cody, SVP of Leasing at Silverstein Properties; Todd Monahan, EVP at Wolf Commercial Real Estate; Ashley Parrillo, SVP at CBRE; and Clint Randall, VP of Economic Development at Center City District.

A Market of Contrasts

Clint Randall opened the discussion with a macro view of Philadelphia’s commercial real estate scene, noting that while momentum has returned, the market remains bifurcated. Trophy office buildings are outperforming Class A spaces. He also noted that although a lot of disruption and uncertainty Philly is still seeing good residential developments with roughly ½ dozen new apartment buildings on the scene.

Leasing Activity: Flight to Quality and Flexibility

Keith Cody reported strong leasing activity at Silverstein Properties, with over 100,000 SF leased in the first quarter alone. He noted that while many tenants are downsizing, demand for high-quality space remains robust. “The flight to quality is important,” said Cody, pointing out that tenants are willing to invest in premium buildings with wellness features and curated amenities—like outdoor space and community programming.

Ashley Parrillo echoed the trend toward trophy assets, predicting near-zero vacancy for top-tier buildings. She shared that most recent deals have been sub-10,000 SF, with larger renewals primarily driven by law firms. Tenant expectations have shifted: common-area upgrades, fitness centers, and generous tenant improvement (TI) packages are now top priorities.

Challenges for Smaller Tenants

Todd Monahan highlighted a critical issue facing smaller tenants is construction costs and a lot of  small users are looking for built-out spaces they can adapt, rather than building new. He also emphasized the importance of understanding capital stacks—a key consideration for tenants negotiating terms in a more complex financial environment.

Sustainability and Wellness: Important, but Not Always Actioned

The panel agreed that sustainability is more prevalent in conversations with larger, portfolio clients—particularly for corporate users. Keith Cody noted that Silverstein Properties recently released a sustainability report, while Ashley Parrillo said the topic often falls off the radar for smaller tenants post-pandemic.

Todd Monahan added that while there is growing interest in certifications like WELL, actual implementation remains limited due to cost.

Randall pointed out that Philadelphia’s biggest sustainability lever may actually be transportation infrastructure, noting that the city's Indigo bike share program logged 1.3 million trips last year.

Back in Business: Center City’s Foot Traffic Surges

One of the most notable signs of recovery? Foot traffic. Randall said pedestrian counts are back to 400,000 as of February 2025—up from just 120,000 at the height of the pandemic. He credited the city’s “SIPS” happy hour initiative as one of the most effective tools in driving office workers and visitors back downtown.

In Conclusion:

The office market isn’t going anywhere—it’s just changing. As companies focus on attracting talent with better amenities and more flexible spaces, there’s a clear shift toward quality, not just quantity. While the market faces challenges like high interest rates and a changing workforce, it’s also full of opportunities, especially for creative and adaptive approaches to office space. The future of Philly’s office market looks promising, with plenty of room for growth and innovation.