Montgomery County's Strong Fundamentals Predict A Bright Future
At Bisnow’s recent Future of Montgomery County event in Lansdale, business and government leaders expressed unabashed pride and optimism for the direction the county is headed.
The county is home to the most active suburb in the entire Philadelphia area: King of Prussia, where the titular mall is surrounded by renovated office construction and incoming multifamily developments. The one thing it’s missing, everyone agreed, is a public transit option to effectively link it to downtown Philly.
“There has to be a train route to [King of Prussia],” JLL SVP Mike MacCrory (below, left) said. “There just has to be.”
Montgomery County Board of Commissioners vice chair Valerie Arkoosh (above, second from right) said there are indeed plans in the works to add a rail spur to the Norristown High Speed Line that would service King of Prussia. Nothing has been finalized, meaning a rail stop is possibly more than a decade away.
Elsewhere in the county, the proximity of public transit has been proving its value for development.
“Bringing residential close to where people are working is where we’re seeing a lot of the most exciting action happening in the county,” Valerie said. “We’re seeing more and more development being built around transportation hubs.”
Montgomery County has been one of the region's stoutest economically for some time, and panelists agreed that it was due to its strong fundamentals—namely, proximity to Philadelphia, quality public schools, open spaces and plenty of attractions. According to Valley Forge Tourism and Convention Board CEO Mike Bowman (above, far left), the county has 30,000 jobs in the tourism sector alone.
“This particular suburban community," said Revere Suburban Realty CEO Brian Regli (above, center), “with all its advantages, represents a tremendous opportunity for much greater upside than some of the communities around it.”
Those fundamentals have meant a wave of multifamily development in the past five years, with even more projects to come. There's also been a strong trend toward redevelopment of Class-B and C office spaces into Class-A, all of it with low cap rates.
“I’m amazed at the prices being paid for office buildings in, say, Conshohocken,” Philadelphia Suburban Development Corp co-CEO Mark Nicoletti said.
Even if not much in the way of new construction is being built at the moment, properties in the county are trading quite frequently—Mike said more than $600M in capital will change hands in 2017.
Looking into 2017 and beyond, all panelists expressed urgency toward infrastructure improvements, beyond just the King of Prussia rail line. With President-elect Donald Trump’s campaign promises of massive infrastructure investments, many see an opportunity to jump in early for additional funding.
Although the developers expressed cautious optimism at Trump’s pro-business agenda, they agreed that his unpredictability is their only serious cause for concern going forward for development in Montgomery County. Otherwise, all systems are go.