What stimulates development in Philadelphia?
This is a loaded question—largely because development means different things to different people. A breakfast meeting yesterday described development opportunity through five different meanings (that I think hold some strong legitimacy in the Philadelphia market):
- Development means change.
The impact of a real estate change and the affect towards residents and businesses is a good synopsis of development. One of the best ways to effectively prevent tension from new construction or a drastic transformation is to engage the local neighborhoods and understand the underlying attributes. Staying true to the existing personality of the area and upholding the neighbors’ values is paramount.
- Development means growth.
Any influential project requires a bold vision and passion to take a risk. Neighborhoods need to be treated delicately, and the context and surroundings of its buildings need to be compatible. Engaging with a new community is a commitment to the growth being sensible.
- Development means opportunities.
With time, it becomes appealing to revitalize the urban fabric we live in. As people’s interests and preferences shift, so must the real estate around us. A drive towards development creates the means to create new fitting features.
Of course, this doesn’t come without challenges. The shortage of trades has caused a lack of skilled labor that is felt in Philly, but also all over the country. The speakers discussed how they believed Philadelphia has a clear, honest process and success is available for developers who do their due diligence.
It seems like the encouragement around development in the Philadelphia region is blatant. There are incentives through partnerships with the state and city that help projects to entertain evolving needs and enhance property values. So, how do firms evaluate if a neighborhood is worth the investment to redevelop? One large attribute is the access to public transit and highways. These regions have an exposure that signals convenience, and is highly sought.
One of the main issues that seems to be a common thread is construction costs. Exploring modular buildings in Philadelphia has been a helpful outlet to cost reduction. Despite higher labor and material costs, there’s a general optimism that continues to grow in Philly, and it’s an exciting time to be in the commercial real estate industry.