PHILADELPHIA-One-third of the 153 apartments in The Grande, a newly converted luxury rental property that opens today at 15th and Chestnut Streets, are rented. This is just one example of Center City’s booming residential rental market.

Nearly three-quarters, 72%, of housing units in Center City are rental units, compared with 41% in the city as a whole, according to Center City District’s 2002 apartment survey. And, although Center City’s stock of new and converted rental units grew by 5,000 units between 1997 and 2002, and gained 1,400 units just last year, the occupancy rate remains above 95%.

Apartments in The Grande, the former Packard Building, rent for between $1,375 a month for a one-bedroom unit, to about $3,200 for a three-bedroom unit.

The owner is locally based Metro Development Corp.

Center City District’s report says average rents are outpacing the rate of inflation. Although rental rates vary dramatically by type and age of building, neighborhood and other factors, the Center City average for a one-bedroom unit increased from $1,234 a month in 2001 to $1,345 a month last year.

The continuing demand for luxury units and the consequent increase in rental rates are not the only factors stimulating the multifamily market here. A 10-year tax-abatement law, passed in 1997, led to the conversion of about 35 vacant industrial and office buildings into 3,391 residential rental units.

One beneficiary is the 20-story Phoenix, an office conversion by locally based Keating Development, which was completed last year.

In 2000, a similar abatement was applied to new construction. Among the beneficiaries are the 242-unit Dockside Apartments on the Delaware Riverfront, which opened this year, and St. James, a 47-story building being developed by locally based P&A Associates, which is under construction on Washington Square West.

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