The Durst Organization’s proposed 26-story, 360-unit apartment project along the Delaware River is among a series of multifamily developments going through the approval process in Philadelphia, underscoring the optimism residential developers have for the city in spite of the pandemic.
A new housing report by Center City District reveals that an area defined as Greater Center City had 9,400 residential units under construction as of the end of last year, which is a 39% increase compared with the 6,762 units under construction at the end of 2019.
Post Brothers is tackling one of the largest multifamily projects currently under development as it continues to transform the Piazza in Philadelphia’s Northern Liberties neighborhood. When it bought the Piazza in 2017, the community had 500 apartments. Another 700 units is in development at a project called Piazza Terminal.
Post Brothers also developed 280 units at the Poplar at Ninth and Poplar streets that is 25% leased.
“Absorption has been incredible,” said Matt Pestronk of Post Brothers. “During the early part of Covid, the market was dead but, across the whole portfolio, we are more leased than we were and at higher rents.”
Post Brothers owns 3,000 units in Philadelphia, excluding apartments under development. Of those apartments, 95% are occupied.
The strong absorption last year was likely helped by a reduction in the number of newly constructed apartments that hit the market. A total of just 1,126 new housing units were built in 2020, which was half of what was completed in 2019, according to CCD. The reduction incompletions last year can be attributed to a halt in construction activity from March through June as a result of state mandates early in the pandemic.
Despite that lull, developers did not stop planning for the future, banking that any population declines driven by the pandemic will be temporary and may even increase as flexible working arrangements have led people to move to Philadelphia, which is more affordable compared with other cities.
The sale last year of development parcels throughout the region, and particularly in Philadelphia, was the highest it has been in at least five years, according to Real Capital Analytics data. By the end of the third quarter, $417.7 million of these properties had traded throughout the region with more than half of that transacted amount — $282.4 million — coming in Philadelphia.
In 2020, even with the pandemic, the 3,842 permits issued stood as the third-highest over the last 30 years, according to CCD.
The surge in permitting activity was driven by a pending expiration of the 10-year tax abatement on new construction, which was scheduled to sunset at the end of December 2020 but was extended for another year. Historically low-interest rates were also a contributing factor.
Proposed projects in the pipeline that have gone or will go before the Philadelphia’s Civic Design Review Committee this month alone involve 1,612 new units. Including the Durst project, the number swells to nearly 2,000 apartments in the works at the early part of this year. The proposals include:
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- Newtrack Development Corp. seeking to build 200 residential units in a 185,266-square-foot building at 2300 Market St. The project is proposed to have 12,048 square feet of commercial space.
- Atapco Properties proposing 185 apartments in a 178,837-square-foot building at 4401 Ridge Ave. that will have 4,400 square feet of commercial space.
- 801 Girard LLC planning 80 units in a 61,291-square-foot building at 801 E. Girard Ave.
- Riverwards Group envisions two projects on East Somerset Street. The developer envisioned 145 units in a 148,936-square-foot building at 2151-58 Somerset and 390 units in a 380,959-square-foot building at 220-50 Somerset.
- Glen Mills Associates has plans for 139 units and 12,991 square feet of commercial space in a 133,897-square-foot building at 1810-34 E. Hagert St., which is also referred to as 1825 E. Boston St.
- Mosaic Development Partners proposes 83 units in a 79,040-square-foot building at 6134-46 Wayne Ave.
- Ampere Capital Group plans 110 units in a 106,374-square-foot building at 1640-48 Hancock St.
- Another 280 units in a 272,111-square-foot project at 119 S. 31 St., which is a property owned by Horizon Housing Inc.
The Durst Organization’s development will be its first along the Delaware River, where it has assembled a series of properties and was last year named developer of Penn’s Landing. The new building will rise on a 1.6-acre parcel located between Vine and Callowhill streets. As planned, it will include 10,000 square feet of retail and a third of the property will be dedicated as open space.
*Article courtesy of Philadelphia Business Journal
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