(To read more on the multifamily market, click here.)

PHILADELPHIA-In a program hosted by Central Philadelphia Development Corp. and led by CPDC director Paul Levy, real estate principals and leaders of cultural institutions offered a snapshot of the local market and summarized their hopes for 2006. Residential expansion is especially robust, and the office market is doing better than some expected, according to Joanne Davidow, VP of Prudential Fox & Roach, and Hether Smith, SVP of the local Studley office, respectively.

"For three years, people keep asking: Is this the top?" Davidow said, "and every year I say I think it is, while it keeps getting better. Though interest rates are up, and (nationally) new home sales are down, the reality I see every day is increased demand, improved demographics and great new and old product. Just a few years ago, a $1-million sale was a big thing, now that's $2 million."

Davidow said demand is from empty nesters, young couples, "everybody, and I see continuing demand among people who want to live here." He says there is still affordable, $250,000-range housing in new and converted properties in upcoming neighborhoods, such as Old City, Graduate Hospital, Northern Liberties and South Philadelphia that are expanding the city geographically."

Smith said third-quarter office leasing absorbed 1.6 million sf, "and rates cranked up a little." Of Cira Centre and Comcast Center, she noted, "they will open over 90% and 70% leased," respectively. She cited rumors of potential new construction and said investor sales of office product remains strong for the third consecutive year.

"National trends flow to Philadelphia," said Randy Scott, EVP of Thomas Properties' local office. "With capital very cheap and very plentiful, cap rates are at historic lows." Under those conditions, he said, "the forecast of improved rental rates will come true." He warned, however, "deficits are cause for concern and job growth is uneven."

Calling the Fairmont Park Commission "the steward of our open space," Robert Nix, president of the commission, cited the public/private partnerships that produced the $70-million Please Touch Museum and the $40-million Microsoft school under way in Fairmont Park and urged more such partnerships. "Enjoyment land makes property around it more valuable."

Although Greater Philadelphia Cultural Alliance is non-profit, Peggy Amsterdam, president, said, "We're becoming good marketers." She cited the museum's Dali exhibition, the Live Eight concert and the coming of the Barnes Collection. While many donors contribute to a building, she said amidst concern over the solvency of Kimmel Center, "there's concern about the costs of operating them." Her wish for 2006 is the creation of a "regional funding stream."

A coordinated regional promotional effort was the overriding theme of closing remarks by Hugh Long, Wachovia's state CEO for Pennsylvania and Delaware. "The city and the suburbs in three separate states can help each other. They "need each other, with a first-class city at its core."

Long agreed with Nix' complaint that Philadelphians' initial response to a 2016 Olympics bid is resistance. "The Olympics movement is a unique opportunity to create regional cooperation," Long said. "Getting involved in the effort has very little to do with actually winning the bid. The effort can be a catalyst for overcoming negativism. Though "winning is almost incidental. I believe we can win."

Instant Insights /

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