Tuesday, January 17, 2023
Major Student Housing Developer Plans Second Project Near Drexel University in Philadelphia
By Richard Lawson CoStar News
One of the nation’s largest student housing developers and investors plans to build its second project near two Philadelphia universities.
Landmark Properties announced Thursday that a new 363-unit tower called The Mark will rise 34 stories within a few blocks of the University of Pennsylvania, an Ivy League school, and Drexel University.
The project also includes 55,938 square feet of existing historic office space next to the tower. Renderings provided by the developer appear to show the tower rising next to The Ralston House, a building constructed in the 1880s as a home for indigent, elderly women, according to documents on file with the city of Philadelphia. The University of Pennsylvania currently uses The Ralston House as office space.
The Athens, Georgia-based firm is well underway on construction of The Standard at Philadelphia, a 280-unit property a short distance from The Mark. The Standard is scheduled to open this fall with The Mark following in 2026.
Last year was a record year for Landmark. It did $4.7 billion in transactions to bring assets under management to $10.4 billion, the most in the company’s 20-year history. The firm also struck two deals with the Abu Dhabi Investment Authority, a sovereign wealth fund that invests on the Middle Eastern country's behalf, totaling $3 billion to buy properties and build new ones. Landmark closed out the year teaming up with Canadian investor Manulife Investment Management to build student housing, starting with a development near the University of Connecticut.
Monday, January 16, 2023
Friday, January 13, 2023
Wednesday, January 11, 2023
Apartment Owners Face Increased Lease-Up Competition As Apartment Development Ramps Up in and Around Center City Philadelphia
The record-breaking supply surge will temporarily outpace renter demand during this cycle. Subsequently, marketing efforts aimed at a more constrained renter pool have already ramped up in these neighborhoods, and lease-up competition will likely continue through mid-2024. If overall macro environment confidence improves near-term, the springtime may unlock pent-up renter demand. However, this supply wave will still moderately exceed even the highest demand levels seen throughout the golden period between late 2020 and early 2022. As vacancy trends upward alongside the wave of new additions, daily asking rent growth is expected to moderate, while concessions will become more widespread throughout 2023.
A review of Apartments.com listings indicates that concessions have returned in early 2023. Nearly half of the top properties in each area offer some form of concession, from a $500 move-in credit to a generous two months of free rent plus a $1,000 move-in credit for city, education and health professionals. Several stabilized properties with occupancy above 90% are even offering concessions.
As renters digest recent rent surges, landlords will need to re-evaluate what 2023 rental rates are competitive to lease up individual developments in a sea of high-end options for renters. Across three-star properties in these five areas, vacancy is 6.5%. Meanwhile, across four- and five-star properties, vacancy is already at 10% and is expected to increase in the near term with the large number of new deliveries. While rent differentials may fluctuate drastically across individual properties, the average market rent differential between three-star and four- and five-star properties is $445 per month for studio units, $540 per month for one-bedroom, and $860 per month for two-bedroom units in these five areas.
In 2023, four- and five-star multifamily owners will need to prepare for the heavy competition ahead, but there should be a reprieve by late 2024 from a significant slowdown in new large-scale supply entering the market. Until then, property owners should focus on renter retention as much as renter attraction to maintain a well-occupied, competitive development.
