Key Takeaways
• Most companies and organizations are now offering some form of limited-capacity, voluntary re-opening of their offices. Limitations include split shifts and health monitoring protocols. Talson Solutions held a small outdoor staff meeting and felt it was very good for morale.
• Many Members are cautiously optimistic as everyone tries to figure out how bad things are, both locally and on a national level. On the positive side, lots of new activity is being seen in many areas and deals are going through (even if at a slower rate). Construction lending is showing some activity, some rental vacancies are being filled by people returning from overseas, multi-family is strong, life sciences and healthcare are strong, there’s an uptick in neighborhood shopping centers, vacancies aren’t as high as expected with some new retail tenants moving in since the beginning of the pandemic, there has been an uptick for minority-owned business referrals and there is capital available in the market, unlike in 2008.
• On the negative side, hospitality and retail industries are struggling and expect to get worse before they get better, funding for transportation and infrastructure is down, investors are reluctant for the status quo, some tenants are moving out of the city, new deals have slowed since last year, some current activity may be attributed to a backlog of prior work and bankruptcy lawyers are working overtime.
• Some Members are seeing activity in construction loans, though most equity requirements are higher and lenders prefer to work with companies with whom they have an established relationship. More capital is coming from commercial lending sources.
• Many accounting changes are taking place, including a transition from Libor to SOFR, as well as potential adjustments if there’s an administration change after the election.
• The Durst Organization has been selected by the Delaware River Waterfront Corp. for the Penn’s Landing redevelopment project. Pennoni Associates is also in the final design stages for the I-95 cap.
• The Panama Canal has put out a $2 billion RFP for water management to help adjust for climate change.
• The tax abatement is set to expire at the end of the year, which has created a temporary surge in projects affected by the change.
• Housing prices in Philadelphia continue to hold strong, with a 58% increase since 2012, and continue to outperform the suburbs and the national average. Condo prices are also up, but cooler than the housing market.
• New building permits have taken a hit, due to both the tax abatement ending and the pandemic.
• Inventories are exceptionally low and Philadelphia is still in a deep seller’s market. This could lead to high home values, but could also result in a bad over-correction.
• Foreclosures are down due to a moratorium on them, which has just recently expired. Because 20% of households will have missed July’s rent or mortgage payment, this could lead to a sudden surge of foreclosures.
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