PHILADELPHIA | Highrise Development Thread X

[EastSideHBG]

Originally Posted by McBane

That's because Boston in general is more expensive. Higher wages, higher taxes, higher home prices, higher cost of goods, higher everything. It's not really an apples-to-apples comparison. If you're relocating to Philly from Boston or NYC or DC, SF, Seattle, etc. then yes, under those circumstances, Philly/Rittenhouse is a bargain.

Yeah other than just being city to city, there is not much in common otherwise.

[TempleGuy1000]

Originally Posted by McBane

That's because Boston in general is more expensive. Higher wages, higher taxes, higher home prices, higher cost of goods, higher everything. It's not really an apples-to-apples comparison. If you're relocating to Philly from Boston or NYC or DC, SF, Seattle, etc. then yes, under those circumstances, Philly/Rittenhouse is a bargain.

So like you understand my point about retail being different on Walnut and Newbury St. then? Lol.. That's the only reason I brought it up.

[skyhigh07]

Originally Posted by TempleGuy1000

So like you understand my point about retail being different on Walnut and Newbury St. then? Lol.. That's the only reason I brought it up.

Going off averages alone is probably not a great comparison. High poverty levels in Philly will tend to lower the various averages significantly. It doesn’t necessarily mean there isn’t demand for luxury retail in Rittenhouse, the city and overall region.

I mean, a John Varvatos opened in downtown Detroit about 5 years ago lol. Retailers go where they see demand and potential.

Final point, if we’re going off the assumption that Philly just doesn’t have the demographic demand to support luxury goods and services then how do we support the various local luxury hotels and restaurants that at this point are on par or even exceed many other downtowns with higher end retail?

[Frontst17]

How many people live in Rittenhouse vs back bay? Back bay seems considerable smaller geographically than what is considered “rittenhouse” (whose boundaries seems to expand every time I talk to someone) the housing is different too as back bay was built for wealthier citizens. It’s built as if every street was Delancy. Although we know the wealth and desire for high end things is there, but on the outside the average numbers may not bear that out. Just an observation

[skyhigh07]

Originally Posted by Frontst17

How many people live in Rittenhouse vs back bay? Back bay seems considerable smaller geographically than what is considered “rittenhouse” (whose boundaries seems to expand every time I talk to someone) the housing is different too as back bay was built for wealthier citizens. It’s built as if every street was Delancy. Although we know the wealth and desire for high end things is there, but on the outside the average numbers may not bear that out. Just an observation

Some of the brownstones and mansions along Commonwealth Ave, Beacon St. etc are still single family homes but many are broken up like in Rittenhouse. Overall, you’re right, it feels smaller geographically and there aren’t as many residential high rises (both old and new) as there are in Rittenhouse.

To some extent all of this is arbitrary - both are high end and relatively expensive neighborhoods. You can go back and forth all day comparing foot traffic, population, neighborhood boundaries etc, but at the end of the day I think given the amount of high end development in Rittenhouse right now and given the fact it’s well established, I don’t think it’s outrageous to claim it could afford a few more luxury retailers at this point.

Also, Rittenhouse primarily was the upper class neighborhood in Philadelphia during the nineteenth and early twentieth centuries. However, due to the Quaker culture of the city which valued modesty and restraint, upper class housing tended to be plainer and more uniform than what you might find in Boston, New York or Baltimore. Also, many of the larger mansions along Walnut, Chestnut and around Rittenhouse Square were later demolished to make way for high rises. Not to mention that “new money” tended to build more lavishly up on North Broad.

[Knight Hospitaller]

Originally Posted by iheartphilly

Just found out Union League is getting a rooftop restaurant built on top of its building. I didn't see it get posted here:

https://www.phila.gov/media/20211209...supplement.pdf

Doubt it will be open to the public since its a members only club.

Wow. Belonged once when I was single into newlywed-hood. Couldn't justify it as my family grew and work permanently relocated to the burbs. This place keeps getting more and more "over the top." They have five satellite locations in the burbs and at the shore, which number was exactly zero in my day. Luckily, outside events are held there, so the question is whether that space will be dedicated to members or available for rent.

[ScreamShatter]

Originally Posted by skyhigh07

Going off averages alone is probably not a great comparison. High poverty levels in Philly will tend to lower the various averages significantly. It doesn’t necessarily mean there isn’t demand for luxury retail in Rittenhouse, the city and overall region.

I mean, a John Varvatos opened in downtown Detroit about 5 years ago lol. Retailers go where they see demand and potential.

Final point, if we’re going off the assumption that Philly just doesn’t have the demographic demand to support luxury goods and services then how do we support the various local luxury hotels and restaurants that at this point are on par or even exceed many other downtowns with higher end retail?

Didn’t we have a Burberry and Barney’s on Walnut? Both closed.

Luxury hotels don’t necessarily translate to demand for luxury retail. Our luxury hotels are mostly filled with business travelers who mostly work, eat, and sleep. If we had more recreational luxury travelers + live-in wealth like New York, Vegas, or even smaller places like Charleston (which has Louis Vuitton, Hermès, etc), then we’d have more luxury stores.

Just my theory.

[3rd&Brown]

Originally Posted by ScreamShatter

Didn’t we have a Burberry and Barney’s on Walnut? Both closed.

Luxury hotels don’t necessarily translate to demand for luxury retail. Our luxury hotels are mostly filled with business travelers who mostly work, eat, and sleep. If we had more recreational luxury travelers + live-in wealth like New York, Vegas, or even smaller places like Charleston (which has Louis Vuitton, Hermès, etc), then we’d have more luxury stores.

Just my theory.

Barney's basically went out of business everywhere. It's not specific to Philadelphia.

[skyhigh07]

Originally Posted by ScreamShatter

Didn’t we have a Burberry and Barney’s on Walnut? Both closed.

Luxury hotels don’t necessarily translate to demand for luxury retail. Our luxury hotels are mostly filled with business travelers who mostly work, eat, and sleep. If we had more recreational luxury travelers + live-in wealth like New York, Vegas, or even smaller places like Charleston (which has Louis Vuitton, Hermès, etc), then we’d have more luxury stores.

Just my theory.

Usually, business travelers don’t stay at The Ritz, W or Four Seasons unless they’re independently paying out of pocket for some reason. Charleston is a small city and it doesn’t have any of the big brand luxury hotels. Theoretically, you’d have more wealthy people in Philly given its size whether they live, work or play here. Besides, is KOP a recreational luxury travel destination?

I think there’s something to be said about international travelers but we keep going round and round with this - at the end of the day it’s KOP that competes for retailers. I’ve heard commercial brokers in the city say this over the years as well.

[Knight Hospitaller]

Originally Posted by TempleGuy1000

So like you understand my point about retail being different on Walnut and Newbury St. then? Lol.. That's the only reason I brought it up.

I hadn't been to Boston in 25 years until last fall. For a city half the size of Phila., the amount and quality of retail was astounding. Not just Newbury and the like. Unlike the Gallery, Prudential Center seemed to still be doing well and was an inviting place. I was sort of depressed by the comparisons.

[skyhigh07]

Originally Posted by 3rd&Brown

Barney's basically went out of business everywhere. It's not specific to Philadelphia.

Good point. Also, I think right around the time when Walnut was edging into higher end retail (Barney’s, Michael Kors, Burberry), you also had the beginning of the downswing for national brick and mortar retailers. It likely hurt any momentum Walnut was having and then it got slammed with everything during 2020.

So it’s apparent higher end retailers were starting to take notice of Walnut and saw demand there during a short window period between maybe 2012-2018 but unfortunately the timing probably wasn’t quite right for the momentum to sustain itself.

So hopefully, we can boil it down to three things: KOP, brick and mortar and 2020.

[TempleGuy1000]

Originally Posted by Knight Hospitaller

I hadn't been to Boston in 25 years until last fall. For a city half the size of Phila., the amount and quality of retail was astounding. Not just Newbury and the like. Unlike the Gallery, Prudential Center seemed to still be doing well and was an inviting place. I was sort of depressed by the comparisons.

I don't find it depressing. I see it as an opportunity. A very exciting opportunity because Rittenhouse, really all of Center City, is already one of the greatest slices of urban life in America and still has tremendous potential to grow and improve. Truly, I feel that way about much of the city. I just want our regional leaders to be maximizing that potential with good short-term and long-term plans.

[Knight Hospitaller]

Originally Posted by TempleGuy1000

I don't find it depressing. I see it as an opportunity. A very exciting opportunity because Rittenhouse, really all of Center City, is already one of the greatest slices of urban life in America and still has tremendous potential to grow and improve. Truly, I feel that way about much of the city. I just want our regional leaders to be maximizing that potential with good short-term and long-term plans.

Being a fellow fan of our hometown, I have been waiting for this to happen for decades. We seemed to be on the right course, but nature and the market can only take us so far. I'm to the right of Atilla the Hun, but at least felt that Rendell (and to some extent Nutter) could provide enough leadership to get things done. Everyone else has coasted on his predecessor's accomplishments until his administration slowly ground to a halt (thinking of Street and Kenney).

[PHLtoNYC]

Originally Posted by skyhigh07

Good point. Also, I think right around the time when Walnut was edging into higher end retail (Barney’s, Michael Kors, Burberry), you also had the beginning of the downswing for national brick and mortar retailers. It likely hurt any momentum Walnut was having and then it got slammed with everything during 2020.

So it’s apparent higher end retailers were starting to take notice of Walnut and saw demand there during a short window period between maybe 2012-2018 but unfortunately the timing probably wasn’t quite right for the momentum to sustain itself.

So hopefully, we can boil it down to three things: KOP, brick and mortar and 2020.

Add outrageous rents.
At one point Walnut Street commanded some of the highest commercial rents in the nation, and everything crashed at once (like a housing bubble). Meanwhile KoP rents are 1/3 lower AND sales are higher, the math didn't work. And of course the brick and mortar downturn, Covid, etc.

But it appear brick & mortar is turning around, and Walnut is on the up. Nothing like KoP, but retailers are coming back.

Two other big issues with Walnut / Chestnut...

1. The burned out hole on the 1700 block of Walnut needs to be fixed ASAP.

2. I think Ritt Row is the marketing / planning group for retail in the area? But it feels a bit ad hoc, low enthusiasm, no city support, etc. (unlike Simon with KoP). Walnut / Chestnut needs an aggressive marketing / planning committee, beautification committee, someone to work with landlords, and city support in a moratorium on banks & cell phone stores. I noticed new planters and holiday lights on Walnut (a start), but the corridors need more TLC, a high street needs to look like a high street.

[TempleGuy1000]

Originally Posted by Knight Hospitaller

Being a fellow fan of our hometown, I have been waiting for this to happen for decades. We seemed to be on the right course, but nature and the market can only take us so far. I'm to the right of Atilla the Hun, but at least felt that Rendell (and to some extent Nutter) could provide enough leadership to get things done. Everyone else has coasted on his predecessor's accomplishments until his administration slowly ground to a halt (thinking of Street and Kenney).

I think if you teleported someone from 2000's Philly to 2022 Philly, they would be dumbfounded by all the positive changes. Perspective is everything.

I think if you showed someone, from even 2012, that development and gentrification was reaching this point of Germantown Ave., they would be shocked.
• Video Link

From the river trails, to all of lower north philadelphia, the expanded restaurant scene, new music venues, new stadiums, new museums, University City expanding as a secondary central business district. The revitalization of the Navy Yard. Dilworth, Spruce Harbor, Race/Cherry piers, Cira Green. Countless awesome improvements in the last 20 years.

[skyhigh07]

Originally Posted by Knight Hospitaller

Being a fellow fan of our hometown, I have been waiting for this to happen for decades. We seemed to be on the right course, but nature and the market can only take us so far. I'm to the right of Atilla the Hun, but at least felt that Rendell (and to some extent Nutter) could provide enough leadership to get things done. Everyone else has coasted on his predecessor's accomplishments until his administration slowly ground to a halt (thinking of Street and Kenney).

I mean, I appreciate how far Walnut has come over the last 15 years baring some of the national economic trends it’s gone up against recently. Newbury St has been established as a high end retailer corridor for quite some time. Contrasting that, there were parts of Walnut that were still little shabby 10-15 years ago. And then all of the sudden, I remember being amazed when we got an Apple store and then a Theory and then a Barney’s and then they tore down the old shabby looking building on 15th/Walnut and put up the building where Cheesecake Factory is now. There definitely was a retail boom and it all happened pretty fast. It really changed the vibe.

[skyhigh07]

Originally Posted by PHLtoNYC

Add outrageous rents.
At one point Walnut Street commanded some of the highest commercial rents in the nation, and everything crashed at once (like a housing bubble). Meanwhile KoP rents are 1/3 lower AND sales are higher, the math didn't work. And of course the brick and mortar downturn, Covid, etc.

But it appear brick & mortar is turning around, and Walnut is on the up. Nothing like KoP, but retailers are coming back.

Two other big issues with Walnut / Chestnut...

1. The burned out hole on the 1700 block of Walnut needs to be fixed ASAP.

2. I think Ritt Row is the marketing / planning group for retail in the area? But it feels a bit ad hoc, low enthusiasm, no city support, etc. (unlike Simon with KoP). Walnut / Chestnut needs an aggressive marketing / planning committee, beautification committee, someone to work with landlords, and city support in a moratorium on banks & cell phone stores. I noticed new planters and holiday lights on Walnut (a start), but the corridors need more TLC, a high street needs to look like a high street.

Right! There was a huge retail/renovation boom that really changed the vibe of Walnut starting in the early 2010’s. I’m sure landlords are still trying to capitalize off that for better or worse. I didn’t know about KOP being 1/3rd the rent. That seems ridiculous for Walnut to be so high. No wonder some of the storefronts have been vacant for years.

I like to pretend most visitors think that the burned out hole on Walnut is in anticipation for a glamorous new high rise

I agree. Didn’t Londonee help push for the planters and lights? Or am I making that up?

[Frontst17]

Let’s not forget the unfortunate fact that some boomers and gen x (just being honest) who are in charge of these decisions still view us somewhere between Detroit and Baghdad. Millennials and gen-z for the majority love it here and are ready to spend their money. They just need the options and opportunities.

[Redddog]

Originally Posted by skyhigh07

Right! There was a huge retail/renovation boom that really changed the vibe of Walnut starting in the early 2010’s. I’m sure landlords are still trying to capitalize off that for better or worse. I didn’t know about KOP being 1/3rd the rent. That seems ridiculous for Walnut to be so high. No wonder some of the storefronts have been vacant for years.

I like to pretend most visitors think that the burned out hole on Walnut is in anticipation for a glamorous new high rise

I agree. Didn’t Londonee help push for the planters and lights? Or am I making that up?

Rents absolutely need to be reined in. It's astounding to me that a landlord would rather sit vacant than to bring their rents in to market rate. As long as the math works better in KOP, that's where they're going.

They did make a christmas effort last year on Walnut. Hoping to see Chestnut get some more love this season.

[skyhigh07]

Originally Posted by Redddog

Rents absolutely need to be reined in. It's astounding to me that a landlord would rather sit vacant than to bring their rents in to market rate. As long as the math works better in KOP, that's where they're going.

They did make a christmas effort last year on Walnut. Hoping to see Chestnut get some more love this season.

I agree, if they reined in rents I think we could get some faster momentum going. Then again, they’re starting to fill up again on Walnut so maybe they think they can ride it out.