Quote:
Originally Posted by 1487
hopefully one gets under construction before the market becomes clearly saturated. The only good thing is there isn't a ton of new product in the immediate area of this site. Of course if 1910 chestnut and 1911 Walnut actually move forward that changes things a bit.
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The market is not saturated, and there are no signs of the market becoming saturated - not sure where you got this info from. It SEEMS as though the market has slowed down, but it hasn't. There have just been a dozen or so apartment buildings that have finished up or are finishing up around the same time. One Water Street, the Collins, Griffin, Dalian, etc. are all meeting their lease-up goals. The expectation for a new luxury highrise in Philadelphia is 13 months until lease up.
1919 Market, 3737 Chestnut, Icon, etc. all leased up AHEAD of expectations. 1919 Market is expected to lease up in 10 months - which is way ahead of goal.
Other buildings like Touraine, Icon, 2116 Chestnut, 3737 Chestnut, 1900 Arch, 2040 Market etc. are all fully leased up.
The only two buildings to struggle that were recently completed are Tower Place, and 3601 Market. I wouldn't say that is from market saturation though, but rather from location (Tower Place) and location and ridiculous asking prices on rent (3601 Market) due to the location. Evo struggled a little at first as well, but that was because they missed their construction deadline for completion to start leasing before the school year started.
I still think there is room for more apartment buildings, especially as the job base and population are growing in Philadelphia. There is still demand.
The one thing about this development though, is 600 units all at once will be tough to absorb within 13 months. Philadelphia is still a slow growth market. I think if they take the East Market route, and start one tower first, then start of the second tower 13-15 months out, this will allow the first tower to lease up before the second tower is complete.