Avison Young has begun a serious expansion into Philadelphia, indicative of, and in response to, the city’s growing national and international profile as a fertile market for commercial real estate development and investment.
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AY, which opened its Philly office in 2013, has hired two new executives to its Philadelphia office in the past couple of weeks: Peter Greenhalgh as executive vice president of industrial, and Jim Pasquarella as senior vice president of capital markets and investment sales.
Greenhalgh was a co-founder at Waldron Commercial Realty Advisors and director of industrial at Cushman & Wakefield while Pasquarella came over from CBRE, where he was a vice president.
The hires are reflective of two things: Avison Young prioritizing industrial and investment sales for its growth plan, and its ability to grab talent from the highest levels of the industry in doing it.
The Canadian firm is far from done. Philadelphia managing director David Fahey said he anticipates adding 50 to 100 more employees in the region while expanding from its main Conshohocken office and small Center City presence to more space downtown and in the suburbs of the Lehigh Valley, Delaware and New Jersey.
Those are big goals that will take some time, but for the near term, Fahey also has specific goals in mind.
“I would hope that in the next year that we can do, at minimum, one more acquisition and add another five, eight or 10 people,” Fahey said.
AY is trying to move as quickly as it can — Fahey said he would like to finish growing “six months ago” — because Philadelphia is at an important inflection point, with interest from out-of-market investors at an all-time high for the city, but with room to grow yet.
“Although Philly has always been steady with ‘Meds and Eds,’ banks and insurance, there’s never been great reason for growth,” Fahey said. “All of Philadelphia should take their hats off to Comcast, because their growth has been impressive, and their clientele who want to do business close to them have spawned a new way of thinking in the area. It’s allowed the great minds from Philly universities to stay in the city, and that has a direct correlation to real estate.”
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Office construction is still very slow in Philly, which is giving investors confidence that the market will not be flooded — and considering some of the city’s demographic trends, it is a crucial sticking point.
“Philly is No. 1 in Millennial growth among the 30 largest U.S. cities, and in housing value and opportunity among top metros,” Pasquarella said. “Corporations in the suburbs are tapping this talent by opening Center City offices; Vanguard serves as the most recent example of this trend. The availability of office space that appeals to these educated and creative workers is relatively low, so that demand is giving us long-awaited rent growth.
“But the best news is that we have tremendous room for more growth, as we are still second-lowest [in] office rents among top metros. Investor confidence is high in Philadelphia’s promise for more growth,” he said.
AY is also looking to greatly expand its property management business in Philadelphia, which Fahey said “could be very intensive from a personnel point of view.” In recent months, they have brought on Catherine Swanson as a senior associate in tenant and landlord representation, with more hires on the horizon.
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