Saturday, March 21, 2015

Philadelphia's housing stock gets a boost in "luxury"

The view from 500 Walnut | Philadelphia, PA

Let's start this one off with a few examples.

When someone uses the term "luxury" to describe clothing, you probably have certain brands that come to mind. For me, I think of Burberry, Louis Vuitton, etc.

When someone uses luxury to describe cars, you probably have certain brands that come to mind as well. For me, they are Porsche, Bentley, etc.

When someone uses luxury to describe real estate, what comes to mind? For me, it's cities like New York, LA, Chicago, and DC. For sellers of luxury real estate in those aforementioned cities, that's where buyers have the option to spend $10M, $20M, or even $50M+ on their next home; or maybe, their home-away-from-home (aka pied-a-terre).

That's how much "luxury" real estate runs for the super-rich today.

But what if I told you that Philadelphia, as a city, was now aggressively trying to compete for those same luxury home buyers? I mean if anything, why not start with buyers in New York? Philadelphia is a short 90 mile commute, and a lot more reasonable in the price department. Oh yeah, and the last time I checked, it only takes a little over 1 hour to commute from 30th St Station (Philadelphia) to Penn Station (New York) on Amtrak's Acela Express; that's totally doable for those who want to live in Philly and still maintain their job in NYC.

Hey, I'm just stating the obvious here.

Today, for a luxury home buyer in New York City, he/she has the option to spend $85M on a condo in Manhattan; that is based on a general search I did today on Realtor.com. I'm sure there are even more expensive options than that one, listed privately of course.

Seriously, 85 ... million ... dollars!

Holy sh*t, that condo actually exists? Yes it does, my friends. And to an extremely wealthy luxury buyer, who only wants the best in life, money is no object when it comes to high-end real estate.

Now, let's look at Philadelphia.

Today, for a luxury home buyer in Philadelphia, he/she has the option to spend either $15M on a mansion in Rittenhouse Square, or $6.9M on a condo at 1706 Rittenhouse; that is based on another general search I did today on Realtor.com.

As for more expensive options in Philadelphia (again, listed privately), records are about to be broken at one of Center City's newest projects: 500 Walnut.

The most coveted of the 2 penthouse options at 500 Walnut: $17.6M (... or so I have heard/read). In my professional opinion, that is where Philadelphia is looking to go as a city.

And why shouldn't we?

Philadelphia has world-class amenities: the arts, museums, historic sites/architecture, high-end dining/shopping, and some of the top companies and universities in the world (Hello, Comcast + UPenn). Plus, Philadelphia has a top-notch location, right in between 2 of the most expensive places to live in the US (as well as the world): New York + DC.

So if our city can attract world-class residents, we should have world-class real estate opportunities ... right?

Right.

Aside from past projects completed during the last housing boom, such as 1706 Rittenhouse, The Ayer, and The Residences at The Ritz Carlton, Philadelphia proper did not have much of a demand for luxury real estate. All of our area's most luxurious real estate options were located in the suburbs (e.g. Main Line, Bucks/Chester County, etc).

And so with this post, the luxury real estate movement starts to take shape in the City of Brotherly Love & Sisterly Affection.

Now that Center City is experiencing a shortage of real estate supply, mostly in the condo department (To All Sellers, This is good news for you!), new projects are already starting to pop up and meet demand: One Riverside, The Residence at Twelve40, etc.

It will be interesting to see how Philadelphia's luxury sector performs over the next few years, as the local real estate market starts to heat up.

Wednesday, March 11, 2015

The DNC is coming to Philadelphia, and our city is ready for the attention

Sweet graphic provided by uwishunu.com

Sorry to beat the proverbial "DNC dead horse" again, but what can I say, it's big news for Philadelphia!

There have been countless articles, blog posts, and tweets about the Democratic National Convention choosing Philadelphia as its host city in 2016 (Sorry, Brooklyn, NY + Columbus, OH).

But rather than make this the same-old, same-old post about how awesome the exposure will be for our great city, I'd rather focus on what it means for locals: 1) Growing skyline, 2) Transportation improvements, and 3) Social scene. Just by having the DNC come to town means that shovel ready projects, as well as those already in progress, will get higher priority than they did before the announcement was made.

Might I also add that all 3 of those previously mentioned elements are important/related to real estate, which makes this particular post even more appropriate.

See ... part of the reason the Dems picked Philadelphia (aside from us being the city that gave birth to liberty and freedom ... oh, and the fact that our city is awesome), is that they saw what we all currently see: opportunity.

That's the American dream, right? D*mn straight it is.

Okay, let's get started.

In typical PhillyUrbanLiving.com fashion, I'm going to break down my favorite points from this Philadelphia Magazine article (you can find more great articles on Twitter, @phillymag):

- The Changing Skyline: Of course, this one is the easiest one for me to talk about seeing that real estate is my profession. Plus, I just enjoy talking about new development in Philly. Projects like the FMC Tower and the new Mormon Temple should both be completed by the time the DNC rolls into the city, but unfortunately, the Comcast Center for Innovation + Technology will not be up yet; bummer. For the FMC Tower especially, it will definitely represent itself well as the largest Philadelphia skyscraper west of the Schuylkill River.

- How the Dems will get around: This one specifically addresses the strides Philadelphia is making not only toward its public transportation infrastructure, but also toward its bicycling culture (which we are tops in regularly). For SEPTA, the long-awaited SEPTA Key program should be fully operational on all Philadelphia buses, subways, and trolleys; but most likely, not on trains come DNC time. Also, Philadelphia's bike share system (now being referred to as Indego) will be in full rent-a-bike mode for the DNC. Lastly, Uber will most likely be the taxi of choice. I mean seriously, it's just too easy, for both tourists and locals alike.

- Hillary at The Gallery?: I used to visit The Gallery as a kid; it was the "city mall" to us suburban folk. As the 90s and 00s passed, the mall became less cool or more unappealing; but its new image is already starting to change. With all of the recent press The Gallery has received, I can almost guarantee that visitors will want to do some "I'm on vacation" shopping at Philadelphia's version of Century 21 (which just recently took up about 100K sq ft of space at The Gallery). Lots of positive changes are coming to one of the largest urban malls in the US, and the investors/city are just getting started on its transformation.

So as you can see, I really believe that Philadelphia will shine brightly on the DNC's international stage come July 2016.

From one local to other locals, our city deserves it.