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Philadelphia's oversupplied multifamily market has caused a developer to shrink its ambitions for an apartment building.
Pearl Properties has revised its plans for 1910 Chestnut St. from a 32-story, 250-unit tower to one that stands 24 stories tall and contains 183 units, the Philadelphia Inquirer reports. The Class-A apartments it is set to contain would be in direct competition with most of the 6,000 new units delivered in greater Center City between 2015 and 2018.
The permit process that gave Pearl the go-ahead for its initial tower plans were contentious due to the former Boyd Theatre at the site. Pearl agreed to preserve the original facade while demolishing the interior to make way for apartments, a Target, a Spanish restaurant and office space, which Pearl itself would partially occupy, according to the Inquirer.
In October, a Zillow study found that median rents declined in the city for the first time in seven years, while apartment occupancy dropped by 3% to 94% in Center City. Pearl's building, to be named The Harper, is in the Rittenhouse Square micromarket that is perhaps the most desirable location in the city, which experts told the Inquirer is better positioned for absorption than most areas.
Still, many landlords and analysts expect absorption to be an issue among new deliveries, as job and population growth remain sluggish relative to the increase in apartments.
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