Comcast's Commitment To Growing In Philadelphia Pays Credibility Dividends For City

by Steve Lubetkin, Globest.com
A strong commitment to local expansion from one of the city’s marquee companies is cementing the credibility of Philadelphia as a realistic choice for businesses and other organizations considering relocation, according to the heavyweight panelists at last week’s CEO & Leadership Symposium hosted by the Jewish Federation of Philadelphia at the Ballroom at the Ben in Center City.

The Philadelphia real estate market has transformed over the past decade from one with stagnant property values, lackluster sales of condominiums, and slow growth in retail and offices.

“Things are booming in Philadelphia,” says Carl Dranoff, president of Dranoff Properties. “The rental market is good, there are new skyscrapers, millennials are graduating from our universities and staying, Comcast is adding thousands of jobs, office users are coming into Center City because it’s where the workers are, and we have baby boomers too, that are moving back to the city.”

Dranoff’s firm just completed leasing for One Riverside, 68 condominiums in a 22-story building adjacent to the Schulykill River.

Housing follows jobs, Dranoff says. “Jobs create the economic wherewithal for Millennials, young graduates, even baby boomers,” he says. “Jobs create the disposable income which begets housing, which begets people shopping in our stores and eating in our outdoor cafes and restaurants. The knowledge workers are there because of the jobs, and we, the housing producers, follow.”

Philadelphia and other cities are still challenged to provide “workforce housing” for residents who can’t afford to live in market-rate luxury buildings, Dranoff says.

“That’s a complicated subject,” he says. “It hasn’t really been solved in any city across America so far.” Cities have tried direct subsidies, contributions from nonprofits and quasi-government agencies, “fix-up” programs in the neighborhoods including grants for repairs of older housing stock, he says.

“There has not been a highly successful model that I know of that we can say, ‘that’s the one I want to borrow,’” he says.

Brad Korman, co-CEO of Korman Communities, who moderated the program, says business travelers who make longer visits to cities like Philadelphia are looking for different kinds of lodging. In the “extended stay” sector of the hospitality sector, people prefer a condominium style apartment for two or three months, rather than a hotel room, he says.

Increased homelessness and streets that are too narrow for modern traffic are challenges the city faces in putting its best foot forward with visitors, says Meryl Levitz, president and CEO of VISIT Philadelphia.

The transformation of West Philadelphia, once regarded as an urban blight, into what is now called University City doesn’t surprise Dranoff.

“We couldn’t understand why people weren’t developing market-rate housing,” he says. “We brought the Left Bank to market in 2001, it was a hit from day one, 282 apartments. Other buildings have followed us, it’s because that’s where the knowledge workers are. It’s become like the Cambridge area near Boston. The demand was always there, there just wasn’t a guy like me to be the catalyst to get things started.”

As office space requirements and design needs continue to evolve to accommodate technology demands, Comcast Corporation expects to be delivering new options to its corporate clients, according to David Cohen, senior executive vice president with the cable and media giant.

Comcast is about to open its second skyscraper in Philadelphia, the Comcast Technology Center, and as Cohen says, “It’s a building that has 1.3 million square feet of office space and no offices. It is that ultimate open footprint with collaborative workspaces. It’s a vertical technology campus, and the way we designed it is we talked to our engineers, our software developers, our app developers, and asked ‘what do you want in a workspace?’” The building will be equipped with state-of-the-art multigigabit Internet access.

Comcast’s decision to expand in Philadelphia was important from a business legitimacy perspective, says VISIT Philadelphia’s Levitz.

“The jobs and opportunities that it provides are numerous and of the scope that we need here in Philly,” she says.  From a travel and tourism perspective, Levitz says the city’s “walkability” is a big plus for companies considering bringing employees here.

“What we talk about are the neighborhoods, which are so fascinating to people, and you can really cover so many of the cultural sites on foot,” she says, pointing to the robust dining industry. “And you can eat your way across the city every day of the year.”

Korman and Jacob Reiter, president and CEO of Verde Capital, a private equity investment firm, co-hosted the program under the auspices of Jewish Federation Real Estate, an affinity group for participants in the commercial real estate sector in the Philadelphia region.

“We wanted to bring the freshest minds that were leading and adapting to change, that were leading organizations that were visionary,” says Reiter.

“It’s a great thing when you put smart people together, says Korman. “It’s a great opportunity to branch outside the real estate realm and hear how other business leaders and change-thinkers are looking at the world and what they do, and how that impacts what they could be doing in their industries.”

The JFRE group also raises money for nonprofits dealing with hunger, physical and emotional disabilities, and at-risk families in the Delaware Valley and in Israel, says Reiter. About $3 million dollars has been raised and distributed in the past three years, he says.
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