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Philadelphia Rents Nudge Up For First Time Since Last Year

Philadelphia multifamily rent growth has turned to positive — barely — after months of price declines, a new report shows.

Post Brothers' multifamily project Piazza Alta in Northern Liberties, seen well into construction in late July 2022, with the original Piazza behind it and the Philadelphia skyline in the background.

Rents in Philadelphia’s metro area ticked up by 0.1% to an average cost of $1,729 a month at the end of March, according to a new report from Yardi Matrix.

From January to the end of March, building owners with tenants who rent by necessity increased prices the most, with an average 2.4% hike to $1,540 a month, Yardi Matrix reported. Meanwhile, owners with lifestyle tenants increased prices by 2% to an average of $2,244 per month. 

The small boost is the first positive momentum for Philly rent growth since September, according to Yardi.

Yet those numbers may not reflect the whole picture, Cushman & Wakefield Director Keith Braccia told Bisnow.

“Asking rent is certainly up. Effective rent, I think, is lagging behind that because there's two, three months of concession out of the market,” he said. 

Luxury developers in particular are offering concessions, Bisnow previously reported. From gift cards to months of free rent, multifamily operators have been advertising offers to lure new tenants amid a supply glut. 

Over the first quarter, 604 new rental units were added to Philadelphia’s stock, with no signs of a slowdown until 2026. In total, 6,253 new units will come online this year, according to the Yardi Matrix report. The boom is the result of the expiration of a 10-year tax abatement two years ago. Developers hustled to apply for an unprecedented 18,000 units to qualify in time for the break.

Although rents are up, occupancy is still down compared to the same period last year. Across Philadelphia's metro area, the average occupancy rate is 95.5%, a 50-basis-point decline from this time last year.

Douglas Ressler, manager of business intelligence for Yardi Matrix, said the report reflects optimism for Philadelphia's rent growth overall as construction wraps up on an additional 7,000 units in 2025.

As the number of new units coming online “continues to quiet, you're going to see the concessions begin to drop.”

“And with that, you'll see the potential for an influx with [higher] rental rates," Ressler said.

Though Northern Liberties, Fishtown, Kensington and other areas have the highest concentration of new units and some buildings are in hot competition for tenants now, the area’s rent growth could outpace traditionally pricier areas later, according to Braccia.

“Fishtown for a while was dead, and then all of a sudden, there's this huge boom,” he said. “The quality of the product that people are building there rivals the quality of the product that people are building in Center City.”

Center City units are still the city’s costliest at $3.27 per SF on average, according to Cushman & Wakefield’s first-quarter multifamily report. But Northern Liberties and Fishtown are catching up, with prices averaging $2.85 per SF and strong outliers on the high end.

“I know Piazza Alta in North Liberties, a Post Brothers development, is the nicest, highest-water mark in North Philly,” Braccia said. “They're close to four bucks a foot per unit, so that beats out a lot of the Center City product.” 

Braccia said he expects that aging office workers with families or those not willing to live in the heart of Center City may relocate to the areas where thousands of new units are opening up north.

“All these units will fill up,” he said.