Wednesday, August 28, 2019

Luxury Condo Construction Ramps Up in Philadelphia's Center City

Luxury homebuilder Toll Brothers completed its acquisition of a four-story retail and office property at 704 Sansom St. on Jewelers' Row in Philadelphia earlier this month for just over $1.1 million.

The deal is a part of an assemblage of parcels along the 700 block of Sansom Street that will pave the way for Toll Brothers to break ground on its 85-unit Toll Washington Square. The condo development has already completed the Civic Design Review process, secured necessary zoning changes and could begin construction before the end of this year.

Progress on Toll Washington Square comes as groundbreakings for ultra-high-end condo projects are beginning to heat up around Center City. Since the beginning of the summer of 2019, three condo developments have broken ground, including Bock Development’s 2100 Hamilton, Dranoff Properties’ Arthaus and Southern Land Company’s The Laurel, which will build a mix of 189 apartments and 60 condo units on its upper floors.

Condo construction is back on the rise, as only one condo project with more than 25 units has delivered in Center City in the last 24 months. The 38-unit 500 Walnut completed during the summer of 2017, but its penthouse sold more than a year earlier, for $17.85 million, or just over $2,000 per square foot.

Developers remain more focused on apartment development, and condos still only represent about one-fifth of Center City’s total multifamily units currently under construction. However, with stock and bond prices near record highs, purchasing power is as strong as it’s ever been among Philadelphia’s wealthiest residents. Low mortgage rates and booming asset values are supporting demand for newly built Center City condos. Meanwhile, by choosing to build for-sale housing, developers are increasingly jumping at the chance to differentiate residential projects from a crowded field of recently completed high-end rental units.

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