Office Sector News
Philadelphia ‘Poised For Office Boom Not Seen Since Early '90s’
Eight projects totaling 3.6 million square feet are in different stages of planning, marketing and construction for Center City and University City, according to new data from Newmark Knight Frank. In an article on the findings, discussed at last week’s NKF 2020 forecast event, the Philadelphia Business Journal noted that “so much new office construction is currently proposed for Philadelphia that it rivals the late 1980s and early 1990s, when an onslaught of office development … recast the city’s skyline.”
“The rise in new office development underscores trends at work in Philadelphia. Companies have become more comfortable spending top dollar to rent new office space in an effort to attract and retain talent in a tight labor market,” the Business Journal stated.
In one of the discussions, moderated by Sid Smith from NKF, including CCD board members Jeff DuVuono from Brandywine and Randall Scott, Coretrust Capital Partners, the panelists agreed the market was very strong, but with a more competitive tax structure, it could generate far more dynamic job growth. Comparing places where cost information is readily available and transparent, to Philadelphia with its broad array of taxes, DuVuono delivered the quote of the week: “Some cities are like full-service resorts; you pay one wrap-around price for everything included. Philadelphia is like a restaurant where you order your dinner and then find there are extra charges for your fork.”
Law Firm Fisher Phillips To Relocate Offices To Center City
Fisher Phillips is relocating its offices and nearly 40 employees to Center City in April after spending the last 13 years in Radnor. The labor and employment law firm has signed a 14-year lease on 21,000 square feet on the 12th floor at Two Logan Square.
Fisher Phillips said its top decision to move to Philadelphia was to be better able to attract and retain young talent. Another factor was a desire to be closer to the legal community in Center City.
Eds & Meds News
Bachelor’s Degree Holders, Post-Graduation Retention On The Rise
Enrollment in Philadelphia colleges is on the rise, with Temple University, Drexel University and University of Pennsylvania leading in enrollment numbers, according to Campus Philly’s recently released 2019 annual report. Across 30 schools, Philadelphia saw about 33,000 more applications from 2015 to 2017, and enrolled about 3,000 (6.7%) more students during that time, the report said.
The report also found that 54% of students who graduated from 2010 to 2014 stayed in the region, compared to 49% of students graduating from 2005 to 2009 and 48% of students graduating from 2000 to 2004. The number of 25- to 34-year-olds with college degrees is up 115% since 2000, Campus Philly stated.
Saint Joseph's, Jefferson To Train Future Docs As Autism Specialists
Saint Joseph’s University and Thomas Jefferson University are collaborating to develop what they say will be the country's first program to train future physicians as autism specialists. The program, which begins this year, will allow students at Saint Joseph’s University majoring or minoring in autism behavioral studies to participate in Jefferson’s Sidney Kimmel Medical College Scholars program in their junior year, and potentially enter the medical school program without submitting MCAT scores.
The collaboration seeks to combine Jefferson's clinical expertise with the work already being done to educate autism professionals at Saint Joseph's Kinney Center for Autism Education and Support. More than 3.5 million Americans are currently diagnosed with autism spectrum disorder.
2019 Was Another Record-Breaking Year For Hotels
The hospitality industry broke revenue records in 2019, according to new data from the city, Visit Philadelphia, the Greater Philadelphia Hotel Association and the Philadelphia Convention and Visitors Bureau. Room revenue in 2019 totaled a record $707 million, an increase of 4.3% from $678 million in 2018. Hotels in 2019 also saw a record average daily rate of $202.41, a 5.8% year-over-year increase from $191.40 in 2018. With 4.58 million room nights in supply and 3.49 million sold, last year’s demand outpaced the overall five-year average by 4.5%.
Of the rooms consumed, demand was split nearly evenly between business (33%), group (32%) and leisure (31%) travel.
Four new hotels opened in 2019, adding 491 rooms to the city’s supply. Continued development is expected in 2020 with the addition of the $80 million, 236-room Canopy hotel by Hilton at East Market on south 12th Street; the 755-room, dual-branded W and Element project in Center City; and a 332-room Hyatt Centric to the Rittenhouse Square area.
Citywide Events Expected To Bring In 400K Attendees This Year
The city’s hospitality industry will welcome roughly 400,000 guests to the city this year for 20 “citywides" — a convention or event that generates at least 2,000 occupied hotel rooms on its peak night. The lineup will lead to 335,000 hotel room nights, according to data from the Philadelphia Convention and Visitors Bureau.
The events are a significant boon to the city's tourism scene and help support Philadelphia's more than 74,300 hospitality jobs. This year, the city is tracking 19% above its 10-year average for hotel room nights generated by citywides. Tourism officials attribute the growth to the organization’s partnership with the Greater Philadelphia Hotel Association and the Pennsylvania Convention Center over the last decade.
Visit Philly & CCD Partner With James Beard Foundation
Visit Philadelphia's new initiatives for 2020 include a high-profile partnership to further expand the city’s flourishing food scene through a year’s worth of programming with the James Beard Foundation. Launching in August will be the James Beard Restaurant Collective, a new event series highlighting the talents of Philadelphia’s hospitality industry, coordinated by Center City District, the James Beard Foundation and local restaurateurs and chefs.
In tandem with the 100th anniversary of women’s suffrage, Visit Philadelphia will increase its efforts to draw female travelers. To do so, the company is planning a year of programming around history, culture, food and drink, and fitness.
400 Philadelphia Leaders Promoting City At SXSW
About 400 Philadelphians are traveling to Austin’s popular South by Southwest conference in March as part of an effort to bolster business in the city. The "ambassadors" at the two-week innovation and music event, which attracts about 75,000 attendees, include representatives from Comcast, Entercom, Cozen O'Connor, Philadelphia International Airport and Visit Philadelphia.
The cohort, comprised of city employees and members of roughly 40 local businesses and organizations participating in the Philadelphia Global Identity Partnership, will receive talking points on Philadelphia's innovation, talent, tech landscape and culture. The group will aim to integrate the ideas into both formal panel discussions and networking interactions.
Frontier Adds Nonstop Routes To 3 Major Cities Out Of PHL
Frontier Airlines is launching new nonstop flights from Philadelphia International Airport to three major U.S. cities, bringing the carrier's number of routes out of PHL to 24. The discount airline will begin service from Philadelphia to Los Angeles International Airport on April 23, Boston's Logan International Airport on May 1 and Chicago's O'Hare International Airport on May 17.
The expansion will give Denver-based Frontier nonstop flights to 13 of the 15 largest domestic markets out of Philadelphia. Frontier flew more than 1.6 million people out of PHL in 2018, making it No. 4 for total passengers. American Airlines is No. 1 at 22.1 million.
SEPTA’s University City Station Renamed As Penn Medicine Station
SEPTA’s University City Station will be known as Penn Medicine Station following a multimillion-dollar naming rights contract that aims to provide funding for SEPTA through alternative sources of revenue. Penn Medicine will pay $3.3 million over the five-year contract to keep the naming rights.
The funds from the partnership announcement will go toward “the everyday costs of running the transit system,” SEPTA board chairman Pasquale T. “Pat” Deon Sr. said in a statement. The Regional Rail station’s 6,400 daily riders should expect to see changes to signage, maps, and screens in the near future, with full implementation coming in two months.
Bottom of Form
Residential Market News
23-Story Residential Tower Planned At 17th & Race
Exeter Property Group plans a 23-story reflective-glass residential tower beside the Cathedral Basilica of SS. Peter & Paul as a first phase of development at the property. The tower would rise at the corner of 17th and Race streets, displacing what’s now a vacant convent building and a parking lot, according to plans presented to the Civic Design Review board.
The panel, which offers nonbinding suggestions as part of the city’s building-approval process, is scheduled to consider the project tomorrow, February 4. The 245-foot-high building proposed by Exeter will comprise 273 dwelling units. A separate 685-foot-high tower is planned as part of a later phase of development at the corner of 17th and Vine streets.
Co-Living Provider To Add 2nd Greater Center City Location
Quarters, a dorm-like “co-living” chain, will add a second location in Philadelphia in a proposed new building at 1201 Callowhill Street adjacent to the Rail Park. Richard Zeghibe of Patriot Parking plans to develop a six-story, 113,700-square-foot building that will have 239 bedrooms in shared apartments. The project will include 4,000 square feet of retail, 42-space parking garage, 5,000-square-foot roof deck and a 2,900-square-foot lobby with co-working and lounge areas.
The developer anticipates breaking ground in the second quarter with a target of completing construction in the fourth quarter of 2021. Germany-based Medici Living Group operates Quarters, which entered the local market last spring at 1150 N. American Street. That project is slated for completion in the second quarter of this year.
Plans Unveiled For 482-Unit Apartment Complex In Northern Liberties
A local developer plans to build a 482-unit apartment complex on a mostly vacant lot near the Delaware River waterfront at Fairmount Avenue. The proposal by McGovern Holdings calls for two horseshoe-shaped buildings that would nearly fill the block bounded by Delaware Avenue and Front Street, between Brown Street and Fairmount Avenue.
The proposed buildings, rising seven stories at their highest points, would be separated by a walkway lined with ground-floor retail and office space, according to renderings. The project involves the preservation of a strip of historically protected Federal-style rowhouses from the early 1820s that line the Fairmount Avenue-facing edge of the 1.2-acre property.
$280M Speculative Project Breaks Ground At uCity Square
The University City Science Center and its development partners, Ventas Inc. and Wexford Science and Technology, have officially broken ground on One uCity Square, a $280 million, 400,000-square-foot building. While the project will be the 17th in the development of uCity Square, it serves as the first office and lab building to be built on-spec.
In addition to lab and office space, One uCity Square will have ground-floor retail, a full-service restaurant, a lobby reminiscent of a hotel and inviting spaces for those using the building to gather. It is expected to get rents close to or exceeding $50 per square foot, new territory for Philadelphia.
Chicago Firm Bids $240M For Shuttered Refinery Site
Chicago-based developer Hilco Redevelopment Partners had bid $240 million to become the new owner of the 1,300-acre Philadelphia Energy Solutions refinery complex in southwest Philadelphia. The agreement of sale still has to be approved by a Bankruptcy Court judge as part of the refinery’s Chapter 11 proceedings.
Brian Abernathy, the city’s managing director and co-chair of its Refinery Advisory Group, said most of the site is likely to be used as warehouse and logistics space for other development, due to the complex’s rail infrastructure and its proximity to the port, highways and the airport.
Manufacturing, Service Industries See Increased Activity
Manufacturing activity in the region increased for the month of January, according to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia. New orders up for 45.7% of firms, down for 27.5%, and remaining the same for 26.9%. The number of employees increased for 27.7% of the companies, decreased for 11.3%, and was unchanged for 68.8%.
Looking ahead six months, 49.2% of the firms expected conditions to improve, 10.8% anticipated a downturn, and 35.9% predicted no change.
Business indicators suggest continued expansion of activity in the region’s service sector in January, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 33.2% of firms, down for 16.6%, and remaining the same for 26.2%. The number of full-time permanent employees increased for 22.9% of the companies, decreased for 10.4%, and was unchanged for 65.7%.
Looking ahead six months, 48.9% of the firms expected regional conditions to improve, 12.0% anticipated a downturn, and 39.1% predicted no change.
Chamber Of Commerce Members Slightly Less Optimistic For 2020
Respondents to the Chamber of Commerce for Greater Philadelphia's latest member survey expressed slightly less optimism about business conditions in 2020 than in 2019, except when it came to number of full-time employees. Respondents said they believe hiring will be nearly 7% higher in 2020 than in 2019.
Asked what they felt were the biggest problems facing Chamber members heading into 2020, labor quality, wages and benefits costs were the three highest concerns. Fifty-two percent of respondents felt that 2019 was a better year for business than 2018, but 43.2% felt that way going into 2020.
New Features Coming This Spring to Sister Cities Park
Center City District has begun work on enhancements to Sister Cities Park. After surveying dozens of parents and caretakers, and observing how children use the park, CCD developed plans to enhance the Discovery Garden with more ways for children to play while maintaining its intimate and natural feel.
The new and improved Discovery Garden will open in late April. The enhancements will include a climbing net and platform, a “hiding” nest, a stream dam, and push-button operated water jets, in addition to an extended area for plantings and additional stone benches. Transformed by CCD in 2012 from a forgotten space into one of the nation’s leading multigenerational parks, Sister Cities Park is a favorite destination for families with children, school and day care groups, local workers, seniors and visitors to nearby cultural institutions.
For additional details on this project and to learn about how you can support it, click below.
February 20: CPDC’s In Conversation: Fostering Philadelphia’s Tech Growth
Join us at 8:30 a.m. on Thursday, February 20, at Lift Labs PHL, 1801 Arch Street, for Fostering Philadelphia’s Tech Growth: Comcast NBCUniversal LIFT Labs PHL.
Learn from Danielle Cohn, head of LIFT Labs, and Luke Butler, senior director of LIFT Labs PHL, about how Comcast supports and partners with Philadelphia’s startup community to position Philadelphia as a hotspot for startup growth and development. They will discuss how LIFT Labs helps startups not only launch and expand, but eventually become demand-drivers for work space in Center City, through programs including the Comcast NBCUniversal LIFT Lab Accelerator, powered by Techstars.
Sumorwuo Zaza, founder and CEO of NICKLPass, an alumnus of the 2019 LIFT Lab accelerator class, will discuss his experience in the program and his decision to stay in Philadelphia.
This event is open to all members of CPDC firms. RSVP by Friday, February 14 to Romina Gutierrez at email@example.com or 215.440.5543.