Wednesday, April 6, 2016

Philadelphia’s Largest Rental Developments Completed in 2015

by Balazs Szekely
Development dollars have been pouring into Philadelphia, and in late 2014, concerns regarding the market’s ability to absorb new developments were voiced in certain circles. But 2015 results and 2016 predictions for the rental market prove that a growing demand for rental apartments nevertheless exists.

Reporting on the Philadelphia 2016 Outlook conference, Bisnow noted that the last 10 years have seen a 17 percent growth in jobs, primarily in the pharmaceutical and education sectors. In addition, the number of graduates who came to Philly to study, and who remain in the city, has risen from 24 to 67 percent, resulting in growth in the demand for Philadelphia apartments for the young and career-oriented.

The rise in demand for upmarket apartments is confirmed by the latest statistics from Yardi Matrix, with average Philadelphia rentals costing $1,439 per month, while properties completed since 2010 command $2,322 on average. Developments completed in 2015 reflect the latest trends—we focus on the five largest.

  1. 3601 on Market, 363 units

This high-rise development from Southern Land Co. clearly targets young urban professionals, with only 45 of the 363 apartments being two-bedroom units. Apart from the 25 penthouses, the rest of the apartments are studios, one-beds and one-bed alcove apartments. However, the small size of most of the apartments is no indication of low-rent living. On the contrary, hardwood floors, quartz countertops, floor-to-ceiling windows, balconies and amenities such as a pool and fitness center indicate a tenant base that expects a high standard of living. (Image courtesy of the 3601 Market Website)

     2. The Summit, 350 units

The Summit, developed by American Campus Communities, focuses on communal student living, and out of 350 rental units, 228 are two-bedroom units. There are only seven one-bedroom units, with the balance consisting of three- and four-bed apartments for larger student communes. The apartments are fully furnished, and the Academic Success Center with its modern computers and free printing service underlines the focus on student residents. Recreational facilities are aimed at the youth, with a movie theater and outdoor kitchen providing opportunities for in-house relaxation. (Image courtesy of The Summit Website)

     3. 3737 Chestnut, 276 units

A 24-story apartment development from Radnor Property Group, 3737 on Chestnut takes advantage of the need for accommodation suitable for graduates embarking on their careers, as well as those just starting a family, with its one- and two-bedroom apartments. The 276-unit development in downtown Philadelphia offers only 24 parking spaces, reflecting the trend towards no- and low-commute living. Amenities include a fitness center with yoga studio, a game room and rooftop terrace. (Image courtesy of the 3737 Chestnut Facebook Page, Yardi Matrix)

     4. Avenir on Fifteen, 180 units

The retro-style exterior with sandstone-look facade houses 180 rental units with ultra-modern touches, including smart thermostats and stainless steel appliances. Alterra Property Group is also targeting millennials, with studios and one-bedroom apartments representing the majority of units. A variety of amenities, including a fitness center, business center and residents’ lounge, demonstrates a focus on young professionals that is a common thread seen in most new developments in downtown Philly. (Image courtesy of the Avenir on Fifteen Facebook Page)

     5. The Station at Manayunk, 149 units

The trend towards retro-look luxury is emphasized in this complex of five three-story buildings with 149 rental units from J.G. Petrucci Co. The theme is carried through to the interiors with their granite countertops and wood-finish floors. Targeting the same market for one- and two-bedroom apartments as the downtown developments—but with a more suburban location, the pet-friendly community overlooks the Schuylkill River and offers one parking space for each accommodation unit. (Image courtesy of The Station at Manayunk Facebook Page)

This year will see further growth in the Philadelphia rental market, and its resilience is proving attractive to investors and developers.

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