Philadelphia’s Apartment Revival

With developers ramping up construction, multifamily demand remains strong, as the city continues to attract both Millennials and Baby Boomers looking to downsize.

Philadelphia rent evolution, click to enlarge
Philadelphia rent evolution, click to enlarge

The multifamily market in the City of Brotherly Love is expanding, sustained by steady employment and population increases. Job growth was led by the business and professional services sector, followed by health care and education. Philadelphia’s renowned universities and research hospitals are thriving, while the emerging fintech corridor is getting stronger.

Mixed-use developments are gaining traction, especially in University City, which has developed a series of public-private partnerships that have become a key part of the city’s transformation. A new addition to the Philly skyline is the 49-story FMC Tower, dubbed “Philadelphia’s first vertical neighborhood.” The amenity-laden building—which provides office, residential, hotel and restaurant space—is part of Brandywine Realty’s Cira Centre South project along the western bank of the Schuylkill River. What’s more, the massive $3.5 billion Schuylkill Yards and 30th Street Station District master plans are set to transform this section of downtown Philadelphia in the coming decades.

Demand for apartments remains strong, as the city continues to be attractive to Millennials and Baby Boomers looking to downsize. Developers are ramping up construction, with more than 40,000 units in the pipeline. Though there is some uncertainty around whether there will be enough jobs to justify the deluge of new supply, we anticipate rents will rise by 3.4 percent in 2017.

Read the full Yardi Matrix report.