Regions Midatlantic | Philadephia
Nov 1, 2007
By: Elena Gontar, Staff Writer
The Philadelphia apartment market's stable, if slightly lagging, performance continues to attract developers. Though few towers are going up this year, 1,000 units are under construction and 1,900 are scheduled for delivery next year and beyond, according to Marcus & Millichap Real Estate Investment Services Inc.
Joseph Verdejo, a senior director for the Philadelphia office of Cushman & Wakefield Sonnenblick-Goldman L.L.C., confirmed, "New development of rental apartments in the Philadelphia suburbs has slowed down quite a bit." In 2006, 8,926 units came online, compared with the 1,781 units planned for delivery in 2007 and 2008 combined. Still, the recent wave of development encourages him.
Leading the way is Colgate Development L.L.C., Arden Group and Gencron Group, which are developing The Residences at The Ritz-Carlton, a 48-story, 580,000-square-foot skyscraper at 1414 S. Penn Square. The 294-unit project will be the tallest residential building in Philadelphia upon its expected 2008 completion.
Mariner Commercial Properties Inc. plans groundbreaking for the Cricket Club, a 116,000-square-foot mixed-use project in Ardmore, 10 miles west of Center City that will include 29 residential units, for the late summer or early fall of 2008. "With most of our projects, the buildout cycle is significant, and the current state of the market is not really a cause for too much concern," said Mariner Commercial president Timothy Mahoney III. "Even the most bearish prognosticators are expecting the residential market to recover in our region within 18 to 24 months."
Local executives say the sector's rosy future owes to the market's affordability compared with New York City and Washington, D.C. Mahoney went one step further, stating that Philadelphia is evolving as one of the great gateway cities of the Northeast. "The key to the region's stability is its truly diverse economy," he said, pointing to higher education and the healthcare, research, law, banking and insurance industries.
"People want value, stability and potential for investment growth from their home," said John Westrum, CEO of Westrum Development Co., which has several multi-family projects in the pipeline. "Philly has great potential and value and just needs to get its reputation back in line as a place to live and work without it being too costly for what services are received."
Mahoney even said that the remainder of 2007 and the early months of 2008 will present a new paradigm for developers in Philadelphia. "Long term, there's no doubt in my mind that the Philadelphia region is poised for continued growth over the next 10 years."
—Reach Elena Gontar, at egontar@cpngroup.com.
By: Elena Gontar, Staff Writer
The Philadelphia apartment market's stable, if slightly lagging, performance continues to attract developers. Though few towers are going up this year, 1,000 units are under construction and 1,900 are scheduled for delivery next year and beyond, according to Marcus & Millichap Real Estate Investment Services Inc.
Joseph Verdejo, a senior director for the Philadelphia office of Cushman & Wakefield Sonnenblick-Goldman L.L.C., confirmed, "New development of rental apartments in the Philadelphia suburbs has slowed down quite a bit." In 2006, 8,926 units came online, compared with the 1,781 units planned for delivery in 2007 and 2008 combined. Still, the recent wave of development encourages him.
Leading the way is Colgate Development L.L.C., Arden Group and Gencron Group, which are developing The Residences at The Ritz-Carlton, a 48-story, 580,000-square-foot skyscraper at 1414 S. Penn Square. The 294-unit project will be the tallest residential building in Philadelphia upon its expected 2008 completion.
Mariner Commercial Properties Inc. plans groundbreaking for the Cricket Club, a 116,000-square-foot mixed-use project in Ardmore, 10 miles west of Center City that will include 29 residential units, for the late summer or early fall of 2008. "With most of our projects, the buildout cycle is significant, and the current state of the market is not really a cause for too much concern," said Mariner Commercial president Timothy Mahoney III. "Even the most bearish prognosticators are expecting the residential market to recover in our region within 18 to 24 months."
Local executives say the sector's rosy future owes to the market's affordability compared with New York City and Washington, D.C. Mahoney went one step further, stating that Philadelphia is evolving as one of the great gateway cities of the Northeast. "The key to the region's stability is its truly diverse economy," he said, pointing to higher education and the healthcare, research, law, banking and insurance industries.
"People want value, stability and potential for investment growth from their home," said John Westrum, CEO of Westrum Development Co., which has several multi-family projects in the pipeline. "Philly has great potential and value and just needs to get its reputation back in line as a place to live and work without it being too costly for what services are received."
Mahoney even said that the remainder of 2007 and the early months of 2008 will present a new paradigm for developers in Philadelphia. "Long term, there's no doubt in my mind that the Philadelphia region is poised for continued growth over the next 10 years."
—Reach Elena Gontar, at egontar@cpngroup.com.
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