Center City storefront vacancies on pace to drop to pre-pandemic levels, report says

Storefront occupancy in Center City is on track to reach pre-coronavirus levels by the end of the year, according to a new report.

The Center City District’s survey of retail businesses last month found an 18% vacancy rate, the lowest percentage of the last three years. The rate was 11% in 2019, before the pandemic caused a steep drop in occupancy.

State tax data shows a 94% recovery in sales for retailers and 97% for restaurateurs compared to pre-pandemic numbers, the CCD study found. More than two dozen businesses are set to open in Center City before the end of 2023, according to the district, which promotes activities and public safety initiatives in the area.

“There’s certainly some downtowns out there that primarily function as a place to work, and those places are suffering right now,” CCD Vice President Prema Katari Gupta told Metro. “But what we have is a really diversified downtown, with different groups of people.”

Center City’s population has grown 31% since 2010, adding more than 1,500 residents since 2020, the report said.

Visitor traffic in the downtown is at about 75% of pre-pandemic levels, and total foot traffic is north of 90% on weekends.

A group that has lagged behind is office workers, a significant portion of whom continue to work from home. Just over 61% have returned to Center City, according to the analysis. Of those who do travel downtown, most come in Tuesdays, Wednesdays and Thursdays.

Comcast announced last month that employees will be required to work in-person at the company’s two Center City skyscrapers four days a week in the fall.

“Our sense is that the return-to-work numbers in Philadelphia have not plateaued,” Gupta said.

CCD uses an artificial intelligence tool that analyzes cellphone data to categorize pedestrians as tourists, workers, and residents.

Though the number of streeteries has sharply declined, thanks to regulations characterized as onerous by the restaurant industry, the number of outdoor dining seats in Center City remains 38% above 2019.

Restaurant owners have instead turned to sidewalk cafe licenses, the report indicates. Since March, 36 downtown eateries have expanded their outdoor seating capacity, according to CCD.