October brings increased apartment specials for renters in Philadelphia's Center City

 By Brenda Nguyen CoStar Analytics

Center City, Philadelphia’s downtown, has experienced a notable increase in the share of apartments offering concessions since the spring leasing season. This downtown area encompasses neighborhoods including Rittenhouse Square, Midtown Village, Washington Square West, and Old City.

As of October 2024, more than 62% of Center City apartment buildings are offering concessions to renters, a significant increase from 17.5% that were offering concessions in April of this year. October's figure is the highest level recorded in three years.

Typically, apartment concessions are more prevalent during the winter months when fewer renters are inclined to move due to inclement weather and the holidays. That trend is expected to continue, with apartment owners offering elevated or even increased concessions in November and December, mirroring seasonal trends observed in previous years.

Unlike the situation in 2021, the current surge in rent concessions is primarily supply-driven rather than demand-driven. An influx of new developments hit the market at the same time in early summer. Year to date, more than 850 units across five developments have completed construction. Nearly all are offering concessions that range from one to two months of free rent to waived amenity and application fees.

Three significant recently completed multifamily projects have notably boosted the share of apartments offering concessions: 210S12, Josephine and the conversion of The Residences at The Bellevue. These developments collectively added 787 new apartment units to Center City between June and July 2024, all competing with each other for prospective residents.

Midwood Investment & Development’s 210S12 apartment building, which added 378 units, is offering two months of free rent on a 13- to 16-month lease and up to two and a half months for longer leases. This was the largest new high-rise multifamily development in Center City since Jessup House, a 399-unit high-rise apartment completed in mid-2023. A year after its completion, Jessup House still offers up to two and a half months of free rent on an 18-month lease.

A few blocks away, Lubert-Adler completed the first phase of its conversion of The Bellevue, which included 155 units. The Residences at the Bellevue is currently offering specials that include one month of free rent and a free sporting club membership plan, which begins at $195 per month.

Southern Land Co.’s Josephine, which has 254 units, is offering two months of free rent on a 14-month lease in addition to waived application and amenity fees.

With another 1,185 units currently underway across six other multifamily developments, concessions will likely persist into the spring leasing season of 2025 as developers contend with the expanding supply competition.

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