by Yolanda Rivas
2 min read AUGUST 2019 — Philadelphia’s real estate sector has been in growth mode for a long time. Affordability, a strong economy and the city’s strategic location are some of the drivers behind investment. According to local market leaders, King of Prussia, Fishtown and Kensington are among the neighborhoods experiencing a high volume of commercial real estate activity.
“The construction and new development activity going on in the King of Prussia market is very attractive. Numerous businesses and baby boomers are moving to the area. There is more land available, beautiful housing stock, good school districts and less traffic congestion,” Sean Beuche, regional manager of Marcus & Millichap, said in an interview with Invest:.
King of Prussia’s proximity to a variety of interstates, strategic location and the emerging growth and development going on in the area, makes it an attractive destination for real estate investors. In addition, King of Prussia is home to the largest mall in America by leasable space, which is another major driver for retail activity.
Another area of high activity is the I-78/I-81 Corridor, especially in the industrial and logistics space.
“The shift to e-commerce and modernized supply chains have not only created one of the largest warehouse distribution markets in the world in our backyard, the Pennsylvania I-78/I-81 Corridor, but demand continues to be robust for Philadelphia industrial properties. A variety of users, including retailers and third-party logistics companies, are driving demand so they deliver goods to consumers more efficiently than ever before,” Adam Mullen, market leader for the Greater Philadelphia Region at CBRE, told Invest:.
CBRE’s Pennsylvania I-78/I-81 Corridor Industrial MarketView Q2 2019 report showed that the corridor saw occupancy gains of 1.9 million square feet and observed a total of $135 million in capital investment.
Other areas attracting interest are Point Breeze, which is gaining value, while Fishtown and Kensington have been hot for some time. According to Beuche, areas further along the Main Line region are also seeing numerous investments. Lehigh Valley and Central PA markets, for example, are driving many new investors into Pennsylvania
“As the yields continue to deliver in some of these secondary and tertiary markets, investors want to move outside of areas where they’re getting squeezed by some popularity. There is a bit of a ripple effect being created by the economy being strong for a long time, and many of the investments that have been made or taken in these core markets are pushing investors further out,” Beuche said.
Opportunity Zones are also an attractive area to build market rate, workforce housing and to expand commercial development.
“In Philadelphia, land is still relatively cheap compared to other getaway northeastern markets. Some of the most attractive undeveloped parts of the city are in Opportunity Zones. For example, in Center City East, on the west side of University City, on North Broad Street and in South Philadelphia,” Managing Partner at Alterra Property Group Leo Addimando told Invest:.
To learn more about our interviewees, visit:
Alterra Property Group: https://alterraproperty.com/
Marcus & Millichap: https://www.marcusmillichap.com/about-us/offices/philadelphia-pennsylvania