Here are five reasons that the pace of Philadelphia’s recovery may be poised to accelerate, benefiting not only the office market, but the residential, retail and hospitality sectors as well.
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Five Reasons to Believe in Philadelphia
1. Companies Who Relocated / Opened Offices
in Philadelphia
Philadelphia Establishment and Employment Growth
By NAICS Sector
100,000 SF
200 Jobs
Accounting
and
Bookkeeping
Architectural
and
Engineering
Computer
Systems
Design
Management
and Technical
Consulting
Advertising
and PR
Management
of Companies
and Enterprises
42,000 SF
130 Jobs
60,000 SF
290 Jobs
38,000 SF
100 Jobs
112,000 SF
TBD
Source: Savills Studley
Philadelphia credits up to $25,000/job created or 2%
of the annual wages paid for firms that can create at
least 25 new full-time jobs or increase their full-time
Philadelphia workforce by 20% within a five-year period.
Source: http://www.phila.gov/commerce/Documents/JCTC.pdf
Five Reasons to Believe in Philadelphia
“Change” is Part of “Challenge”
#1 Philadelphia’s CBD Viewed As an Asset
#2 Professional / Business Services Segment Is Growing
Source: Bureau of Labor Statistics.
Includes all NIH grants awarded in
Philadelphia in FY 2014.
0%
4.9%
4.0%
7.5%
5.2% 5.2%
0.8%
4.7%
13.0%
3.9%
6.9%
3.8%5%
15%
10%
Establishment Growth, % Change Q3 2013 – Q3 2014
Employment Growth, % Change Q3 2013 – Q3 2014
1.5%
$871
million
in
grants
2. Five Reasons to Believe in Philadelphia
“Change” is Part of “Challenge”
#3 Young Workers Are Changing Philadelphia’s Demographic Composition
#4 Rising Office Rents
Change in Fraction of the Resident Population Aged 20-34
2007 and 2013, in Percentage Points
Trophy Space is at a Premium
New Privately-Owned Residential Building Permits
Philadelphia
0%
Philadelphia
County, PA
New York
County, NY
District of
Columbia
Fulton
County, GA
(Atlanta)
Baltimore
County, MD
Essex
County, MA
(Boston)
1% 2% 3% 4% 5% 6%
5.9%
5.1%
4.3%
2.9%
1.5%
1.0%
19973Q
2007 2008 2009 2010 2011 2012 2013 2014
19982Q
19991Q
19994Q
20003Q
20012Q
20021Q
20024Q
20033Q
20042Q
20051Q
20054Q
20063Q
20072Q
20081Q
20084Q
20093Q
20102Q
20111Q
20114Q
20123Q
20132Q
20141Q
20144Q
18% $36
16% $34
14% $32
12% $30
10% $28
8% $26
6% $24
4%
1,000
500
1,500
2,000
2,500
3,000
3,500
4,000
4,500
$22
2%
0
$20
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Total Vacancy Rate Total Avg. Asking Rent
# Units
Construction Cost (Millions)
Arrival of Comcast Center
Cira Center11 “Trophy” Properties
1. 1650 Market St. – One Liberty Place
2. 50 S 16th St. – Two Liberty Place
3. 130 N 18th St. – One Logan Square
4. 100 N 18th St. – Two Logan Square
5. 1717 Arch St. – Three Logan Square
6. 2929 Arch St. – Cira Centre North
7. 1701 JFK Blvd. – Comcast Center
8. 1735 Market St. – BNY Mellon Center
9. 1901 Market St. – Independence Blue Cross
10. 2005 Market St. – One Commerce Square
11. 2001 Market St. – Two Commerce Square
Source: American Community Survey, 1-Year Estimates, 2007 and 2013. Source: Census Bureau.
Source: CoStar and Savills Studley.
3. Five Reasons to Believe in Philadelphia
“Change” is Part of “Challenge”
#5 The University Impact and the Comcast Effect
Savills Studley is the leading commercial real estate services firm specializing in tenant representation. Founded in 1954, the firm pioneered the conflict-free business model of representing
only tenants in their commercial real estate transactions. Today, supported by high quality market research and in-depth analysis, Savills Studley provides strategic real estate solutions to
organizations across all industries. The firm’s comprehensive commercial real estate platform includes brokerage, project management, capital markets, consulting and corporate services.
With 26 offices in the U.S. and a heritage of innovation, Savills Studley is well known for tenacious client advocacy and exceptional service.
The firm is part of London-headquartered Savills plc, the premier global real estate service provider with over 27,000 professionals and over 600 locations around the world. Savills plc is
listed on the London Stock Exchange (SVS.L).
For more information, please visit www.savills-studley.com and follow us on Twitter @SavillsStudley and LinkedIn.
Hether Smith
Philadelphia Co-Branch Manager
hsmith@savills-studley.com
215.563.4000
Heidi Learner
Chief Economist
hlearner@savills-studley.com
212.326.8648
Greg Soffian
Philadelphia Co-Branch Manager
gsoffian@savills-studley.com
215.563.4000
University Impact: Comcast Effect:
A new $1.5 billion patient pavilion is underway,
with 700-beds (and 50 operating rooms) planned.
The company is taking 1.28 msf of office
space in the newly-constructed Innovation and
Technology Center (which, at a cost of $1.2
billion, will mark the tallest building in the United
States outside of New York and Chicago).
The company has announced the formation
of a new enterprise led by its CFO that
will focus on investments in global growth
businesses, with $4 billion in investment
capital coming from Comcast directly.
Preparations for a 563,000 sf development
along the Schuylkill River have started.
A preliminary strategy is developing for 10 sites
and 6.4 msf from 30th to 32nd Streets and
Market Street to JFK Boulevard