Job Growth Driving Center City
As long as the jobs keep coming, the future of Center City's bright. Millennials don't just want those jobs, they want work in an urban setting, and Philly's got it, according to our speakers at the 4th Annual Future of Center City event yesterday.
Of course, Center City isn't just for Millennials. Baby Boomers who moved to the suburbs decades ago are returning to find it a much better place, our speakers explain. Companies still HQ'd in the 'burbs are expanding into Downtown Philly to attract those talented young (and older) workers who want to work and live there. About 375 real estate pros came to the Ritz-Carlton to hear about Center City's bright prospects.
Philadelphia Deputy Mayor for Economic Development Alan Greenberger, who's also director of the city's Commerce Department; among his numerous achievements, he oversaw the rewrite of Philly's zoning code. There's about $8.5B in major development projects recently completed, underway or in design in the city, our speakers point out, all of which helps make Philly attractive for companies and young talent. Perhaps more importantly, Center City's alive in a way it hasn't been for years: people want to not only work there, but be there the rest of the time.
SEPTA general manager Joe Casey, who oversees a transit system with a budget of $2B with 9,300 employees. Act 89 will enable the agency to make major capital improvements, including work on three Center City stations, such as City Hall Station, basically untouched since the 1920s. Transit is a critical part of attracting to and keeping people in Center City, since the rising generation is less attached to their cars than their elders. They want the kind of transit SEPTA provides.
Post Brothers president Matthew Pestronk, an apartment and retail developer in Center City and other markets. Our speakers note that one of the reasons for optimism about multifamily development is about 70% of Class-A apartments in Center City are over 30 years old—product almost the same age as the people landlords are trying to rent to. The more Philly becomes a walkable live/work/play market, the more demand for new product.
Dranoff Properties CEO Carl Dranoff, who's an urban multifamily developer, along with retail and entertainment venues. That dynamic's also true for retail space, the speakers explain. Among the new population in Center City, there's demand for new retailers, and larger ones as well. That means opportunity in the retail space in the years ahead, as long as job and population growth continue.
MRP SVP Charley McGrath, whose company is new to Philadelphia, but an eager player across all asset types, including Downtown apartment development. He's snapped in front of Avenue of the Arts, an MRP project. Our speakers further noted that Millennials aren't the only game in town. Boomers are returning too, and one reason is that the city has so much more to offer than when they were younger. The parks and recreation infrastructure has improved—Schuylkill River Park, for example—as well as Downtown's walkability. (Millennials aren't the only people who like a good urban stroll.)
National Real Estate Development managing director Daniel Killinger, whose company has three major developments across the country, including the East Market project. The panelists also say that a lot of students live in Center City, and more importantly, the neighborhood is now retaining about 65% of those graduates, more than it ever has. Many Millennials are getting their taste for urban living from their experience as students in interesting, walkable places—such as Center City.
JLL managing director Ron Cariola, who oversees Philly for the global company. Even the most long-standing suburban companies are eying operations in the city to capture the growing pool of talent who want to be there, the speakers say. That in turn is going to drive demand for creative office in Center City, which is still a largely unmet need in the city.
BLT Architects principal Michael Prifti, who moderated. His company has been designing multifamily for over 30 years. City schools remain a critical issue, our panelists concluded. Some day, Millennials might decide to leave the city for better suburban schools, as their parents did. But an expanding residential base and increasing tax base could help improve urban schools.