Tuesday, July 30, 2019

Apartment Rent Growth in Philadelphia's Conshohocken Submarket Surpasses 4% As New Development Remains at Bay

The Conshohocken/Plymouth Meeting apartment submarket has been in a sweet spot for local landlords since 2016. The submarket’s modern office stock and location, squarely between Philadelphia and the metro area’s wealthy western suburbs, have attracted relocations and expansions by major employers including KeyBank, Cotiviti and the National Comprehensive Cancer Network.

While new companies are moving in, rental demand is increasing. But projects including Roseland’s 51 Washington St., and MLP Ventures’ 433 Washington St. have encountered delays, and no large apartment projects have delivered in the Conshohocken/Plymouth Meeting submarket in more than three years.

The influx of white-collar employers, combined with minimal growth in the local apartment stock has kept apartment rents climbing. Annualized rent growth averaged 3.7% over the past 36 months and year-over-year growth rose to 4.5% at the end of July 2019.

There is only one project currently under construction throughout the entire submarket: Korman Communities’ 275-unit AVE Blue Bell, which will include a luxury hotel-like set of amenities and a large share of extended stay units.

The project is targeting completion by the summer of 2020, putting it on track to deliver just a few months before AmeriSourceBergen expands into its new Conshohocken headquarters at SORA West.

Other projects could break ground in the months ahead. MLP Ventures is currently working with Whitemarsh Township officials to receive the necessary permitting and variances to break ground on a 270-unit project at 601 Washington St.

Late last year, Morgan Properties purchased Millennium Corporate Center, a 197,000-square-foot office portfolio. The firm may seek to convert part of the property into apartments after AmeriSourceBergen vacates 70,000 square feet in 2020, when its new headquarters completes just two blocks away.

However, these projects are both at least 16 months from completing since neither has broken ground. This means apartment demand is likely to continue running ahead of supply in Conshohocken well into 2020.

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