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PHILADELPHIA-In the wake of the proliferation of Center Cityresidential condos, rising construction costs and an up-tick inmortgage rates, Opus East has pulled the plug on its initial plansfor a 39-story tower containing 292 for-sale residential units.Instead, it will develop a 14-story, 257-unit rental property at1919 Market St. Ground will break in July, with completion twoyears after.

The cost-estimate for the original plan, announced in December2005, was about $135 million. "By the time we got through thedesign process and zoning approvals, the costs, primarily for oil-and steel-related products, came in 32% higher than our initialpricing," Craig Guers, VP and general manager of PlymouthMeeting-based Opus East, tells GlobeSt.com. "That would move upcondo prices by about $150,000 a unit. Interest rates also went up,and so did the number of condos in Center City.