Why Millennials, Boomers Keep Flocking to Center City
Center City fundamentals are as strong as they've ever been (or at least since Ben Franklin covered the market in Poor Richard's Real Estate Almanack), and will sustain more growth. MRP SVP Charley McGrath, who will speak at our 4th annual Future of Center City event March 17 at 7:30am at the Ritz-Carlton Philadelphia, tells us why.
1. Center City's Ripe for New Residential Space
Center City’s core population grew 24.2% over the last decade, while household income increased 45%, as it experiences a renaissance into a diverse environment attracting young residents and empty-nesters. In fact, as Baby Boomers migrate to Center City, they're entering a population that's comprised of 60% Millennials. About 70% of Center City's apartment units were built over 25 years ago, Charley says. The influx of people will increase the demand for newer properties.
2. The Higher Education Infrastructure
Philadelphia has the second-highest number of four-year colleges in the country, second only to New York, with more than 92 degree-granting institutions in greater Philly. Of these, 13 are located in Center City. Some 368,000 students are enrolled in the metro area, with 32,000 students Downtown and an additional 54,000 in University City. Graduates are staying in the area more than they used to, supporting growth. Pictured: LeBow College of Business at Drexel U.
3. Center City's Already an Educated Place
Center City Philadelphia’s population of 180,000 makes it the third-largest CBD in the country, Charley explains. Center City has one of the highest concentrations of residents with post-secondary education in the US: in 2000, nearly 68% of Center City’s residents held at least a bachelor’s. By 2013, the figure had grown to more than 75%. MRP is at work on redeveloping the Avenue of the Arts building at Broad and Chestnut into 220 units of apartments.
Dranoff Properties CEO Carl Dranoff, who will also be a speaker, tells us that the luxury condo market has rebounded strongly as more Baby Boomers sell their suburban homes because of their desire to experience city living firsthand. Center City offers residents walkability and access to top restaurants and cultural attractions, besides new parks and recreation choices, including the Schuylkill River Park, Dilworth Plaza and the Delaware River Piers. Center City's also seeing a significant boost from tourism—a driver that will continue to grow. In the coming years, Philadelphia will become home to more global luxury hotels, notably The SLS International Hotel, Residences at Broad and Spruce Streets, and the new Four Seasons Hotel in the second Comcast Tower.
Post Brothers president Matthew Pestronk, who will also speak at the event, stresses that jobs and schools—repairing the public school system—are the critical factors in keeping growth on track in City Center. His company's betting that healthy residential demand will spur the success of its 260 S Broad St condo redevelopment. To learn more, please join us for our 4th annual Future of Center City event March 17 at 7:30am at the Ritz-Carlton Philadelphia. Sign up here.