In a surprising turn amid the active multifamily market in downtown Philadelphia, Mack-Cali Realty has pulled out of plans to develop a multifamily project at 709 Chestnut St.
The project was to be a 300-unit JV with local developer Parkway Corp, which owns the property, but Jersey City-based Mack-Cali paid $800k to renounce its stake in the project, the Philadelphia Inquirer reports.
Mack-Cali gave the increasingly high cost of building and flattening rent prices as reasons for backing out of a project that it once called "a cornerstone of the burgeoning Market Street East neighborhood."
Rent growth has indeed flattened over the past few years, from 3.7% from June 2013 to June 2014, to 3.1% over the same time period a year later, to only 1.4% over the period ending June 30 of this year.
Much of that flattening can be chalked up to the increase in available, new-construction rental properties, a trend that should continue over the next few years. With several multifamily developments still yet to complete, this may not be the only announced plan to fall through, or at least stall. [Philly]
