2/14/22 Philadelphia Mastermind Group Meeting

February 2022 Philadelphia Mastermind Group Key Take Aways!

• Most members continue to be busy, fielding a lot of new proposals and handling a backlog of work. (Robert Bright – Talson Solutions, Mark Celoni – Pennoni Associates, Jim Karmolinski – Kelly Maiello Architects)
• There is a large inflow of money for infrastructure projects, including transportation and other public works projects.  While this is good for remaining busy, it will put a strain on the supply chain and also on the labor market, which is already strained as companies turn down deals due to lack of senior staff.  (Robert Bright – Talson Solutions, Jim Karmolinski – Kelly Maiello Architects)
• Residential multi-family remains strong, despite the expectation that many deals went through in 2021 trying to beat changes to the tax abatement. Rent growth is still accelerating, but the acceleration has slowed. There are concerns over the large number of permits that have been issued and whether those permits will become buildings and if so if the market can absorb those units. (Mark Celoni – Pennoni Associates, Christian Dalzell – Counter Management, Jim Karmolinski – Kelly Maiello Architects, Paul Fiorilla – Yardi Systems, Edward Opall – EisnerAmper)
• Industrial remains strong. Life sciences is experiencing an explosion, with deals so hot they’re not requiring pre-leasing.  Self-storage is strong and there are a lot of education and rebuild projects. (Mark Celoni – Pennoni Associates, Bart Mellits – Ballard Spahr, Paul Fiorilla – Yardi Systems, Jim Karmolinski – Kelly Maiello Architects, Edward Opall – EisnerAmper)
• There has been a lot more interest coming in from outside of the Philadelphia market and that trend has continued. (Mark Celoni – Pennoni Associates, Jim Karmolinski – Kelly Maiello Architects)
• Many large companies with deep pockets are going all in on office buildings. Though few are buying new properties, they are investing in renovations of older units with the expectation that the office market will come back. (Edward Opall – EisnerAmper, Jim Karmolinski – Kelly Maiello Architects, Bart Mellits – Ballard Spahr)
• The Bellwether Project is a large project expected to break ground in the next 12-18 Months. (Bart Mellits – Ballard Spahr, Paul Flora – Federal Reserve Bank of Philadelphia)
• Inflation continues to be a big issue but there is good reason to hope it won’t persist too long. It will likely not resolve at least until the supply chain issues resolve and everyone hopes there isn’t another Covid wave, which has been very disruptive.  Wages are likely to increase but are probably catching up.  It’s possible a recession is lurking. (Paul Flora – Federal Reserve Bank of Philadelphia)
• Building owners are focused on amenities and are trying to find ways to make their space stand out from the next building.  These include rooftop spaces, game rooms, etc. (Joseph Viturello – PernaFrederick Commercial Real Estate)