Key Take Aways from Philadelphia May 2021
- The industrial warehouse market remains busy with low inventory. (Bart Mellits – Ballard Spahr)
- There is a lot of optimism and activity in the Life Sciences market. (Bart Mellits – Ballard Spahr)
- There is a continued upswing in demand in multi-family (especially in Center City), with signed leases increasing month over month since approximately last October and concessions dissipating. Philadelphia is doing better than many other comparable east coast cities in this area. (Christian Dalzell – Counter Management, Paul Fiorilla – Yardi Systems)
- There is a pronounced uptick in tenants looking at commercial space, particularly in health and fitness related business. There is also more noticeable foot traffic and commuters. (Christian Dalzell – Counter Management, Matt Musilli – Johnson, Kendall & Johnson, Job Itzkowitz – Old City District, Kevin Krause – Ten-X, Jim Karmolinski – Kelly Maiello Architects)
- The office market remains down, with many companies still in the process of deciding what a post-pandemic return may look like. Approximately 50-60% of companies are planning some version of a hybrid model for occupancy and many are expecting considerable reductions in square footage. The trend had begun before the pandemic, but has escalated. Many executives and attorneys need less administrative support. (Job Itzkowitz – Old City District, Bart Mellits – Ballard Spahr, Michael Fox – Fox Real Estate, Paul Fiorilla – Yardi Systems)
- Many tech firms are merging, being acquired or relocating. (Job Itzkowitz – Old City District, Michael Fox – Fox Real Estate)
- Outdoor dining has returned. It’s expected that some rules will continue for at least the near future (such as less regulation to use sidewalk space and parking lanes) and others may be more limited (such as shutting entire streets down). (Job Itzkowitz – Old City District)
- Activity on auction site Ten-X has increased across the board, month over month. (Kevin Krause – Ten-X)
- Activity in general is higher than it has been in the recent past and higher than expected. (Jim Karmolinski – Kelly Maiello Architects)
- There is a shortage in the labor market in a variety of sectors. There are many reasons for the shortage, including increased unemployment benefits, skilled workers who left the market in 2008, childcare issues, early retirements, higher wages in manufacturing and a lack of interest in training for skilled trades. (Jim Karmolinski – Kelly Maiello Architects, Paul Flora – Federal Reserve Bank of Philadelphia)
- The Fed is not too worried about inflation – yet. Higher prices are expected due to supply chain issues, but it’s predicted that will be temporary. (Paul Flora – Federal Reserve Bank of Philadelphia)
- Some indicators of economic strength may be confused by increased demand for other reasons, particularly the labor shortage, supply chain issues and businesses closing. (Paul Flora – Federal Reserve Bank of Philadelphia)
- Insurance rates continue to be high, especially in residential and with older buildings. (Matt Musilli – Johnson, Kendall & Johnson)
- Philadelphia is a hub for sports betting and e-sports. These companies have aggressive growth plans for the next few years and some companies are in need of large training facilities. (Matt Musilli – Johnson, Kendall & Johnson)
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