3/14/22 Philadelphia Mastermind Group Meeting

April 2022 Philadelphia Mastermind Group Key Take Aways!

• The office market remains uncertain. There have been a lot of contractions and very few expansions, though not a lot of offices closing down completely and thus far tenants have not abandoned spaces. Subleases are helping to keep rental rates stable, though it’s unclear how things will change in the next 6-18 months. Total office space in the city hasn’t changed much over the past 15-20 years. (Bart Mellits – Ballard Spahr, Joseph Viturello – PernaFrederick, Carlo Batts – Rittenhouse, Michael Fox – MS Fox Real Estate Group)
• There is a big hole in the retail spaces that surround office buildings, and those tenants won’t hesitate to abandon their space. (Carlo Batts – Rittenhouse)
• The industrial and life sciences markets remain very busy. (Bart Mellits – Ballard Spahr)
• The suburban office market is getting back to normal with less contraction than in the city. Businesses and office buildings are smaller and more diverse. (Michael Fox – MS Fox Real Estate Group)
• Multi-family remains strong, including in the suburban market. (Carlo Batts – Rittenhouse, Sara McCormick – Ballard Spahr)
• Residential rent  has increased a lot over the past two years in certain areas of the city and rental owners in those areas have been helped by a lack of new supply coming onto the market. (Christian Dalzell – Counter Management)
• Old City has been rebounding with residential growth and more new retail opening up, including Riverwoods Produce. There are also a variety of new public works programs in process and a new retail attraction document should be available in the next few weeks. If anyone is seeking space in Old City, Old City District can help match you with properties. (Job Itzkowitz – Old City District)
• There is some hesitancy with investors, due in part to the uncertainty the war has created, and many are not taking on more risky projects. (Carlo Batts – Rittenhouse)
• The census report paints a false picture and more people are moving into the city than the census is giving credit for. (Christian Dalzell – Counter Management)
• Zoning in the city needs a more moderate and measured approach in regards to capping the height of buildings in given areas. Current regulations fail to address the community or the environment. (Christian Dalzell – Counter Management)

• Water damage deductibles have been increasing significantly as insurance companies are pricing in worse weather moving forward. (Matt Musilli – Johnson Kendall Johnson)