The city office market also was shored up by diminishing supply, as some older office buildings were converted to housing, hotels and telecommunications hubs.
In the suburbs, growth from financial and technology companies already in the region prompted construction.
And in the region's industrial markets, city properties benefited from a new tax-abatement program creating Keystone Opportunity Zones, while a lack of ground in the surrounding suburbs pushed industrial growth out as far as Harrisburg.
In the city, three million square feet of office space was leased during 1999, according to Insignia/ESG, a commercial real estate brokerage.
"That was the strongest showing since the early 1980s," said Gregory J. West, Insignia's executive director.
Some of the biggest leasing deals of 1999 came late in the year.
In December, the Delaware Group ended its long search for new space, settling at Commerce Square. And three large consulting firms - PricewaterhouseCoopers, Arthur Andersen and Andersen Consulting - signed new Center City leases in the fourth quarter.
Two law firms with leases coming up for renewal have been out looking: Pepper Hamilton, which is at Two Logan Square at 18th and Arch Streets, and Ballard Spahr Andrews & Ingersoll, which brokers say is likely to remain in Mellon Bank Center at 18th and Market Streets.
In Center City, the office market has been shored up by the conversion of older, vacant office buildings to other uses.
The commercial real estate brokerage Grubb & Ellis estimates that the city's office inventory has dropped from a peak of 40.5 million square feet in 1990 to 36.3 million today.
Among the most visible signs of change are the PSFS and Girard Trust buildings and City Hall Annex, which have been, or are being, transformed into hotels. At One Meridian Plaza, 756,000 square feet of office space was wiped out by fire in 1991. And other smaller buildings throughout the city are being converted to apartments.
