The 10 Biggest Philadelphia Real Estate Stories Of 2016
2016 was another big year in commercial real estate in Philadelphia, one defined by continued growth and some big new projects, as well as some controversy. Let's see what defined the year that was.
10. FBI investigates City Council land sales
It’s one of the most common forms of corruption seen in local office, and it hit Philadelphia in 2016. City Councilman Kenyatta Johnson was sued by developer Ori Feibush for directing land sales in his district of Point Breeze to contributors to his campaigns.
Discovery for the suit, which Feibush won in August, turned up something even more worrying: the FBI is investigating Philadelphia’s land sale process, including Johnson. As that investigation continues, it’s possible that more names will come under serious scrutiny, and the way the city does business could be changed forever.
9. Density expands north of Center City
An extremely high percentage of Philly's large-scale commercial real estate is developed in Center City and University City, but as those areas get more and more expensive, it’s no surprise that others are looking to build on the fringes.
Residential projects of unprecedented scale for their locations are going up on Callowhill Street, in the north side of Chinatown and farther west. Much of the existing construction in those areas was industrial, but when those residential projects deliver, retail is sure to follow. Such projects would also put residents comfortably between downtown and more residential and restaurant-driven areas like Northern Liberties and Fairmount.
8. Comcast's aggressive expansion awaits second tower
Comcast is the unquestioned biggest single company in the Philadelphia area— not news on its own, but the degree to which it demonstrated that this year was striking. With FMC Tower’s completion, the cable giant's incoming Technology Center now has the biggest cranes in the sky, but the company is growing at such a rate that it leased 81k SF in Two Logan Square, to go with the 100k SF it already had in Three Logan Square.
As Philly’s “Eds and Meds” drive University City’s growth and help to retain Millennials in the area, Comcast is employing an increasing number of them, while substantially increasing its footprint in Center City.
7. Broad and Washington set for three mixed-use developments
At the corner of Broad and Washington streets, three different mixed-use developments have been proposed, with varying responses from the community.
The largest of them, to be built by Bart Blatstein, has been stuck in a Civic Design Review quagmire, while across the street, Lincoln Square (above) has had to nimbly tweak itself to better suit the historic portions of its plot of land. A third, small mixed-use project has barely raised eyebrows, but a corner of two major streets that once contained next to nothing is going to be a beehive of first construction, then commercial activity.
With so much happening at once, it’s no wonder some locals are concerned about how it will all come together.
6. FMC Tower delivers
Brandywine Realty Trust’s cutting-edge FMC Tower has officially joined Philadelphia’s skyline. It already boasts the highest office rental rates in the entire city, despite being across the Schuylkill River from Center City. Its “vertical neighborhood” will become the Philadelphia stock exchange's new home in 2017, in addition to the title tenant and Class-A apartments. The tower is the biggest sign that University City has become close to Center City’s equal in terms of office and residential desirability.
5. PMC Property Group reneges on affordable housing deal
PMC’s multifamily One Water Street project, when initially announced, was supposed to include 25 units set aside for affordable housing in order to qualify for a zoning variance. But the developer backed out of those plans, opting instead to pay the Philadelphia Housing Trust Fund $3.8M.
At the Bisnow Affordable Housing and Multifamily Forum, Philadelphia Housing Authority president Kelvin Jeremiah said he "regretted that deal," and promised to hold future developers more strictly to set-aside promises.
4. Toll Brothers' contentious Jewelers Row development
Toll Brothers is all set to build an incongruous 29-story high-rise on iconic Jewelers Row, made up of historic, short buildings filled with jewelry stores. It has all the legal permissions required as of now, but legal fights from local businesses and preservationists are underway to stop construction any way they can.
Mayor Jim Kenney has even weighed in, denouncing the proposal and threatening the end of “a productive relationship with the City of Philadelphia” with Toll Brothers, one of the largest homebuilders in the country.
3. Aramark announces new HQ
The food distributing giant Aramark announced in September its plans to move its headquarters away from Center City—their two current offices at 1101 Market St and 100 Penn Square East—to 2400 Market St, right on the east bank of the Schuylkill River.
The new building will also include four floors of available office space, and in 2018 will be a considerable project right between the main business districts of Center City and University City, while opening up yet more space left behind in Market East.
2. East Market anchors development wave in Center City
The neighboring Gallery mall is also undergoing a massive redevelopment, and demand from retailers in the Market East area is higher than it’s ever been. Suddenly, the area near the Philadelphia Convention Center has gone from one of the least desirable sections of Center City to a hub of activity—and East Market won’t even open its doors until next year.
1. Schuylkill Yards, 30th Street Station District Plan announced
In March, Drexel University and Brandywine Realty announced a project that will change the very shape of Philadelphia: Schuylkill Yards, a $3.5B multi-phase project that will add a series of office buildings in the next decade to a new section of University City.
On top of that, the 30th Street Station District Plan, spearheaded by the same players, means to cap the rail yards to the north of 30th Street Station and build a series of office and residential buildings. If it all comes through, construction won’t be fully complete until perhaps 2050, but an entirely new neighborhood will have been formed.