January 28, 2015

Philly Suburbs Revival

The city's thriving, but that's not at the expense of the suburbs, according to our speakers at Bisnow's second annual Philadelphia Future of the Suburbs. (Reports of the death of the suburbs have been greatly exaggerated.)

As the Philadelphia area emerged from the recession, the recovery was more pronounced in the city, as multifamily development, office leasing, and new retail and restaurant openings reflected the newfound popularity of the city. But the suburbs, especially King of Prussia, Valley Forge and Malvern, have renewed strength in job creation, leasing and other metrics. Also, the suburban industrial market's growing fast, as retailers and logistics companies have come to appreciate eastern PA's location relative to the rest of the Northeast, our speakers told the 400 who came to the Radisson Valley Forge Casino.

Brandywine Realty Trust senior managing director Jeff DeVuono, who oversees the company's operations in Pennsylvania. Companies recognize the value of suburban locations in attracting talent that wants to be outside of the city. One example: when IBM bought Fiberlink about a year ago, speculation was that Big Blue was going to abandon Blue Bell for a new Downtown location. IBM did open a Fiberlink office Downtown, but not at the expense of suburban Blue Bell. The company wanted to offer employees the opportunity to work in either place, because not everyone wants to be Downtown.

Keystone Property Group SVP Rich Gottlieb (left), who oversees the development, marketing and management of Keystone's entire office and industrial portfolio. Increasingly, the talent companies need are Millennials. A lot of them love the city, but many are more suburban-minded than is popularly believed, our speakers explained. It's estimated that roughly a third of that generation will live and work in cities, but that still leaves a lot who want to be in the suburbs. If not now, when they have children, and for the same basic reason that many of their parents raised their families in the suburbs: the quality of the schools.

Liberty Property Trust VP Tony Nichols, who's city manager of the Horsham office, where he's responsible for Liberty's portfolio of office and flex space in the northern Philadelphia suburbs. The speakers emphasized that Millennials will be extremely important to the growth of suburban Philly, representing three-quarters of the workforce by 2025. And they aren't going to want to work in the same environment as previous generations. Like in the city, savvy suburban office owners are reinventing their space to be more open and have more amenities that will keep employees on-site longer.

Zommick McMahon Commercial Real Estate president Ryan McMahon, whose company is one of the most active brokerages in commercial sales and leasing in greater Philadelphia. Office space isn't the only part of the suburbs that's being reinvented, the panelists noted. The suburbs themselves need to change if they're to thrive. Increasing density is necessary to create more desirable places to live. The old suburban model that separated office parks and retail and houses has to change--suburbanites want more mixed-use, which developers understand.

Pennoni Associates SVP Daniel DiMucci, who moderated the panel, and who specializes in land development and landscape architecture. He's also a member of the Chester County Planning Commission. A lot of suburban leadership is on board with the idea of densification, too, such as rezoning efforts in King of Prussia and Conshohoken, which aspires to be an edge city. But planning efforts are fragmented by town and township initiatives that are sometimes at cross-purposes. Our speakers said that on the township level, there's more cooperation in seeking to promote growth than there used to be. Even so, there needs to be more cooperation among the suburbs.

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