Market Trends Report FALL 2019
M E M B E R S O N LY
Market Trends Report FALL 2019 PUBLISHED SEPTEMBER 2019 WITH DATA FROM Q2 2019
Introduction
2
Development
3
Office
5
Retail
7
Residential Rental
8
Residential Sales
10 1
Introduction
U
niversity City District’s Market Trends Report for Summer 2019 supplements our comprehensive State of University City publication released each fall. The UCD Market Trends Report captures the latest information on announced and completed projects, commercial transactions, retail leases, and housing market trends. We strive to provide exclusive access to critical, actionable, and timely market data for UCD’s closest partners and supporters. 2
Development
Philadelphia Ronald McDonald House
In the same year they are celebrating their 45th anniversary, the Philadelphia Ronald McDonald House has completed work on their massive expansion that has more than doubled their capacity to serve families in need of temporary housing while children undergo treatment at nearby hospitals. The Room in Our Hearts expansion campaign has grown the organization’s capacity from 45 to 127 rooms at the Chestnut Street house, and modernized and expanded common facilities to more than double the number of families served each year. The project also includes a new green roof, new courtyard, and an outdoor dining area. Drexel Square - the 1.3-acre park that marks the kick-off of Brandywine Realty Trust and Drexel University’s ambitious Schuylkill Yards development - officially opened to the public in June. Designed by West 8 and SHoP Architects, the $14.3 million park is a place for people to gather, rest, and be renewed by the natural world. Conceived as an intimate, natural space within the urban environment, Drexel Square provides a clear transition from the city to a lush enclave, with 23 Dawn Redwood trees standing more than 25 feet tall lining the perimeter. Next up for Schuylkill Yards is the anticipated 2020 completion of the $43.4 million re-imagination of the Bulletin Building, and breaking ground on the recently unveiled East and West Towers at 3001 and 3025 JFK Boulevard. 3
Drexel Square
The University of Pennsylvania has made significant progress on two projects located on 40 th Street. The New College House West at 40 th & Walnut Streets is beginning to rise after a summer of excavation. This 250,000 GSF residential building will be designed specifically as an undergraduate college house, part of Penn’s residential system of shared communities. The estimated completion date is Summer 2021, and the project will target LEED Silver. Just north on the northeast corner of 40 th and Sansom, construction is progressing on Tangen Hall, the seven story, 68,000 square foot mixed-use Wharton building. Tangen Hall will include co-working and collaboration spaces, a VR environment, maker spaces, pop-up retail space for concepts conceived by Wharton students, and a Venture Lab. The building will also house the master’s level Integrated Product Design Program jointly operated by Wharton, the School of Engineering and Applied Science, and the Stuart Weitzman School of Design. The university is targeting a Fall 2020 date for completion.
Tangen Hall
4
Office
A
fter University City office vacancy rates saw slight increases for the first time in many years at the end of 2018, rates have stabilized at 10.6% vacancy at the end of Q2 (2019). Although higher than the typical average for the neighborhood for the past decade, these vacancy rates are still much lower than the region and Center City. The average asking rent saw an uptick from Q4 of 2018, from $38.95/sq. ft. to $39.02. More inventory is on the way with upcoming groundbreakings planned for buildings in Schuylkill Yards and 3.0 University Place.
Local and Regional Office Market Statistics 2019 (Q2) Total Vacant Square Feet
Total Occupancy Net Absorption (sq. ft.) Vacancy Rate Rate
Under Construction (sq. ft.)
Asking Gross Rent ($/sq. ft.)
University City
520,993
10.6%
89.4%
5,463
0
$39.02
Philadelphia Downtown
5,332,247
11.5%
88.5%
164,305
0
$33.24
Region
14,807,460
13.9%
86.1%
66,967
805,045
$29.47
Note: Philadelphia Downtown includes Center City and University City • Source: CBRE
5
Office Asking Rent
Office Vacancy Rate 45
Asking gross rent (USD/sq. ft.)
15
10
5
40
35
30
25
0
10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19
09
Region
Downtown
University City
20
08
20
20
07
19
18
20
17
20
16
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
20
20
07
20
20
Vacancy rate (%)
20
Note: Downtown includes University City and Center City • Source: CBRE
Offices Under Construction
Office Net Absortion
3,000,000
Under construction (sq. ft.)
Net absorption (sq. ft.)
2,000,000
1,000,000
0
2,000,000
1,000,000
−1,000,000
Center City
19
18
20
17
20
16
20
15
20
14
20
13
20
12
20
11
20
20
10
20
09
20
08
20
20
19
18
20
17
20
16
20
15
20
14
20
13
20
12
11
20
20
10
09
20
08
20
20
07 20
20
University City
07
0
−2,000,000
Surrounding region
Note: Surrounding region excludes Downtown Philadelphia • Source: CBRE
6
Retail
T Giant Heirloom Market
Bonchon
he retail market remained hot in the first portion of 2019, with the addition of national brands and much needed amenities opening through the neighborhood.
NOTABLE NEW BUSINESS OPENINGS: Giant Heirloom Market, the second location in Philadelphia for the small-format concept from the supermarket chain, opened in July at 3401 Chestnut Street. The 9,950 squarefoot store includes fresh local produce, grab-and-go meals, plant-based foods, a large gluten-free section, and Philadelphia-area food products. Post Brothers’ redevelopment of Hamilton Court’s retail offerings is nearly complete with the official opening of Korean fried chicken chain Bonchon and boba drinks and Asian nibbles at Tea Do. Twelve stories above street level at Cira Green, Brandywine Realty opened Sunset Social, a stand offering a menu of American eats like burgers and fries plus blended drinks, beer, and wine. Additionally, University City gained a Panera Bread at 40th and Walnut, and new Mexican restaurant Don Barriga opened to much fanfare at 4443 Spruce Street. COMING SOON:
Tea Do
The Board & Brew, a new restaurant, bar, and board game café, is set to open at 32nd and Chestnut Streets in the former CoZara space. Board game cafés are gaining popularity in the city after the success of Thirsty Dice in the Fairmount neighborhood, and The Board & Brew will be the first such concept in University City to offer gaming together with food and a bar.
Sunset Social
7
Residential Rental
R
ental prices currently listed on Zillow have seen an increase since our last report, up from $1,500 a month for all units (from studio apartments to whole house rentals) to $1,720. This increase is less indicative of a larger trend, and more a result of several luxury units being pre-leased before their official opening. As we’ve seen in the past, the highest median rents (currently $2,600) are luxury units in Central University City, and the lowest rates can be found in Garden Court (median $1,100 right now).
8
Zillow Rent Index Monthly Rent
Zillow Rent Index Monthly Rent per Square Foot
$2,200
$1.10
Rent per square foot
Monthly rent
$2,000
$1,800
$1,600
$1,400
$1.00
$0.90
$0.80 $1,200 $0.70 $1,000
2011
2012
Cedar Park
2013
2014
2015
2016
2017
2018
Garden Court
2011
2019
Spruce Hill
2012
2013
2014
Walnut Hill
2015
2016
2017
2018
2019
West Powelton
Note: Neighborhood boundaries as defined by Zillow. The Zillow Rent Index (ZRI) gives rental price insights without bias of homes that are currently listed for rent. • Source: Zillow Rent Index (ZRI)
Median Rent in University City for Current Listings
Current Listing Area vs. Price by Neighborhood
3,000
Central University City
Median monthly rent
Median rent (USD)
2500
2,000
1,000
2000
Powelton
West Powelton 1500
Spruce Hill
Cedar Park Walnut Hill
Garden Court 0
Cedar Central Powelton University West City Powelton Park University City
Walnut Hill
Spruce Hill
Garden Court
800
1000
1200
1400
Median square footage median for all University City neighborhoods
Note: University City includes all neighborhoods • Source: Zillow, August 2019 snapshot
Central UC removed because of lack of data • Source: Zillow, August 2019 snapshot
9
Residential Sales
g in
32nd St
Schu y
lkill A ve
edy Blvd
30th St
ter ce n
d Blv er v Riv
iew
th S
Walnut St
t
Dr
Price
dla
e Av
34th St
36th St 38th St
39th St
40th St
ic Civ
nd
Av e
So u
$100,000 - $200,000 $200,000 - $300,000 $300,000 - $400,000 $400,000 - $500,000
th 48 St
$500,000 - $600,000
Home Sales 160
120
80
40
Q1
Q4
19
18
20
20
17 20
16
15
14
Q3
20
20
13
12
Q2
20
20
11
20
10
0
20
he number of home sales in the district remained fairly steady with the trends of recent years, as have the median sale prices after peaking in 2018. The highest-priced sales of Q2 in 2019 were seen in Spruce Hill and Cedar Park along Baltimore Avenue, while the lowest-priced sales came in West Powelton. Homes are still averaging less than a month on the market before selling, indicative of a continuing hot market for the neighborhood as a whole.
> $600,000
20
e Av ay nw
09
s
Central University City
Spruce St
20
ng Ki
s es
Arch St
John F Kenn
W oo
te es Ch
39th St
41st St
42nd St 42nd St
43rd St 44th St
45th St
46th St
e
Av
ee Gr
T
41st St
48th St 50th St
49th St
47th St g
in
r Sp
ld ďŹ e
ve rA
33rd St
Cedar Park
St
Ave
e Av
Powelton 35th St
re Ave
Baltimo
Av e
y rsit
e
Chestnut
Pine St d Ave
n Ave Powelto Winter St
ve Uni
nc re Flo
Market St
Woodland Ter
St
Spruce Hill
Larchwoo
Cedar Ave Catharine
Locust St
37th St
39th St 39th St
Garden Court
ca s ter
West Powelton
41st St
Walnut Hill
Lan
arden St
32nd St
Spring G
31st St
Residential Sales 2019 Q2
Source: Philadelphia Department of Records
10
Median Home Sale Price
Median Home Sale Square Feet
$500,000
3,000
Median home sale (sq. ft.)
Median home sale price
$450,000
$400,000
$350,000
$300,000
$250,000
2,500
2,000
1,500
$200,000
$150,000
$100,000
1,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Phila Dept of Records
Source: Phila Dept of Records
Median Home Sale Price per Square Foot
Average Days on Market
250 150
Average days on market
Median home sale price per square foot (USD/sq. ft.)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
200
150
125
100
75
50
100 25
50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Phila Dept of Records
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: RedďŹ n Note: historical data may be different from past reports as the data source has changed from MLS to public record data.
11
University City District 3940 Chestnut Street Philadelphia, PA 19104 215.243.0555 University City District (UCD) was founded in 1997 by a partnership of worldrenowned anchor institutions, small businesses and residents to improve economic vitality and quality of life in Philadelphia's University City. Our primary mission is community revitalization. We work within a place-based, data-driven framework to invest in world-class public spaces, address crime and public safety, bring life to commercial corridors, connect low-income residents to careers, and promote job growth and innovation.
To make a secure, online donation to UCD, please visit: www.universitycity.org/donate
universitycity.org universitycity @ucdphl @universitycity
For more information about UCD’s Membership Program: Contact Morgan Rogers Burns, Development Manager at 215.243.0555 x247 or morgan@universitycity.org. 12