Philadelphia ($38/sqft, 21.6% vacancy) and Washington DC ($58/sqft, 19.4% vacancy) compete on different axes: Philadelphia on rent and tax and Washington DC on talent depth.
Philadelphia ($38/sqft, 21.6% vacancy) and Washington DC ($58/sqft, 19.4% vacancy) compete on different axes: Philadelphia on rent and tax and Washington DC on talent depth.
| Metric | Philadelphia | Washington DC |
|---|---|---|
| Region | Americas | Americas |
| Country | United States | United States |
| Class A rent (USD/sqft/yr) | $38 | $58 |
| Class A rent (local) | 38 USD | 58 USD |
| Vacancy | 21.6% | 19.4% |
| Trend | flat | flat |
| Prime yield | 6.9% | 6.3% |
| Premium flex / seat / month (USD) | $700 | $880 |
| Submarkets covered | 5 | 6 |
| Corporate tax | 26% | 27.1% |
| Metric | Philadelphia | Washington DC |
|---|---|---|
| Typical term | 10 yrs | 10 yrs |
| Typical rent-free | 14 mos | 14 mos |
| Lease norms | Modified-gross structures with opex pass-throughs. 10-year terms standard. Free rent of 12-16 months and TI of $90-$130/sqft typical. | Modified-gross structures with operating-expense pass-throughs over a base year. Federal GSA leases are typically full-service with cap on operating-expense growth. Free rent of 14-18 months and TI allowances of $130-$150/sqft are typical on 10-year private-sector deals. |
| Tax note | 21% federal plus 9.99% Pennsylvania corporate net income tax (declining over time) for an effective rate near 26%. Philadelphia Business Income & Receipts Tax (BIRT) applies. | Federal corporate income tax of 21% plus DC franchise tax of 8.25% drives a combined effective rate of about 27%. Class A office tenants are also subject to DC personal property tax on FF&E. |
| Metric | Philadelphia | Washington DC |
|---|---|---|
| Talent index (0–100) | 85 | 92 |
| Talent note | Deep healthcare, life sciences, legal, and academic talent — anchored by Penn, Temple, Drexel, and a deep network of hospital systems. Strong financial services concentration in asset management and insurance. | Deepest federal-services and policy talent pool in the world. Strong legal, lobbying, defense, and consulting concentrations. Tech talent has grown rapidly post-2020 driven by AWS, Amazon HQ2, and federal cloud contracts. |
Philadelphia: SEPTA regional rail (13 lines), broad-street and Market-Frankford subway, multiple bus and trolley routes. PATCO connects Camden and South Jersey. Center City is highly walkable.
Washington DC: WMATA Metro (six lines) plus VRE and MARC commuter rail. Union Station anchors regional rail. Trophy office clusters all sit within a 5-minute walk of a Metro station.
Philadelphia is the cheaper Class A market on a USD basis.
Washington DC has the deeper talent index (92/100 vs 85/100).
Philadelphia has the lower headline corporate tax (26% vs 27.1%). Local incentives can change the effective rate materially.
Philadelphia typical term is 10 years with 14 months free; Washington DC runs 10 years with 14 months free.
Philadelphia: SEPTA regional rail (13 lines), broad-street and Market-Frankford subway, multiple bus and trolley routes. PATCO connects Camden and South Jersey. Center City is highly walkable. Washington DC: WMATA Metro (six lines) plus VRE and MARC commuter rail. Union Station anchors regional rail. Trophy office clusters all sit within a 5-minute walk of a Metro station.
Score Philadelphia, Washington DC and up to two more markets side-by-side on Class A rent, vacancy, talent, corporate tax, and premium flex pricing — all in USD.
Reviewed by Miriam Hollander — Lead market analyst. Last updated 2026-04-15. See our methodology and editorial standards.