Office Sector News
Average Rental Rate in CBD Hits Record High
Philadelphia’s central business district (CBD), inclusive of University City, registered an 89.4% occupancy rate and a record-high average rental rate of $30.35/sf, while the suburbs had a slightly lower occupancy rate, 85.6%, and a lower average asking rent of $25.73/sf, according to JLL’s Office Insight report for Q3 2016. Year-to-date absorption in the CBD was 54,250 sf, compared to absorption of 308,864 sf in the same time period in the suburbs.
University City led the year-to-date absorption in the CBD, with 326,239 sf, followed by Market Street East with 102,047 sf.
The CBD has 2,421,400 sf of office space under construction. To read the report, please go to bit.ly/2dHubwF.
Office Space at Two Liberty Place Sold
Coretrust Capital Partners, an affiliate of Coretrust Capital, an asset manager for Korea Investment Management, which bought Cira Square earlier this year, has contracted to buy 940,000 square feet of office space at Two Liberty Place, the Philadelphia Business Journal reported on October 11. The sale price was not made public, but it was expected to trade in the $250 million range.
Other parts of the building, including the residential floors, The Shops at Liberty Place, and the Westin hotel are owned by other companies, the article noted. To read the article, please go to bit.ly/2dliKI7.
Development Proposed Adjacent to Cathedral
The Roman Catholic Archdiocese of Philadelphia is planning a mixed-use development with possible residential towers just north of Center City's Cathedral Basilica of SS. Peter and Paul, across the street from Sister Cities Park at 18th Street and the Benjamin Franklin Parkway.
The Archdiocese will present its master plan for the proposed development to the Logan Square Neighborhood Association on October 24. The site of the potential development at 17th and Vine Streets is currently a parking lot.
To read the article, please go to bit.ly/2dtQhyV.
Rodin Square Opens
Rodin Square, the new $170 million mixed-use project that includes a flagship-sized Whole Foods supermarket and 293 residential units in the Art Museum neighborhood, was officially unveiled on Friday, The Philadelphia Inquirer reported. One-bedroom apartments range from $1,900 to $3,000, with two-bedroom units ranging from $3,000 to $7,200.
The project was developed by Neal Rodin’s Philadelphia-based International Financial Company LLC and Washington-based Dalian Development.
To read the article, please go to bit.ly/2e0lxq9.
ZBA Upholds Zoning Permits Issued for Jewelers’ Row
After a second day of testimony, the City of Philadelphia Zoning Board of Adjustment on October 5 unanimously voted to deny appeals of zoning approvals granted to Toll Brothers for a 16-story condo tower at 702-710 Sansom Street, The Philadelphia Inquirer reported.
The appeals were filed in response to zoning permits issued by L&I that allowed demolition of the structures and consolidation of the underlying lots into one parcel. The permits were awarded conditionally, subject to Toll's appearance before the city's Civic Design Review board. To read the article, please go to bit.ly/2e5J1fd.
Council Bill Would Enable Schuylkill Yards Zoning
Councilwoman Jannie L. Blackwell has introduced Bill #160839 that would rezone parcels along John F. Kennedy Boulevard and Market Street near 30th Street to allow for high-density, mixed-use development, the Philadelphia Business Journal reported on October 6. The sites are currently zoned industrial and the bill moves to change the zoning to CMX-5. If passed, the change would lay the groundwork for Brandywine Realty Trust’s $3.5 billion Schuylkill Yards and the proposed Drexel University innovation zone.
The bill was referred to the Committee on Rules. A hearing date has not been set. To read the article, please go to bit.ly/2cZCCgp. To read Bill #160839, please go to bit.ly/2dSbF4F.
Residential Market News
Class A Apartment Rents Edge Up
Effective rent in the City of Philadelphia’s Class A high-rise apartments reached an average of $2,257, or $2.51/sf, with an occupancy rate of 83.6%, according to Q3 Delta Associates Apartment Report.
The demand for quality rental apartments in the city remains strong, due to lifestyle, economic, and demographic trends that favor apartment living, the report noted.
New construction has slowed since the first quarter, but 4,509 units were in the 36-month pipeline as of September, an increase of 11% from a year ago. In the near-term, Delta projects an increase in vacancy in the next three years, while rent growth will slow, as substantial new product comes online.
Philadelphia Growth Is Slow
Philadelphia is the 15th slowest-growing large city in the U.S., according to an analysis by WalletHub of 515 U.S. cities, using 14 indicators of economic growth and information gathered between 2009 and 2015, the Philadelphia Business Journal reported on October 3. WalletHub is a personal finance website.
Philadelphia came in 414th overall and 50th in terms of large city growth. Large cities that experienced the highest growth were (in order): Austin, Texas; Bakersfield, California; Charlotte, North Carolina; and Denver and Aurora, Colorado.
To read the article, please go to bit.ly/2d42fA1. To read the WalletHub study, please go to bit.ly/1QJPllA.
Understanding the Shifting Nature of Jobs
A new Pew Research Center report, The State of American Jobs, released on October 6, and produced in association with the Markle Foundation, combines extensive surveys of workers with analyses of employment data to try to understand how the shifting economic landscape is reshaping work and society.
Since 1980, employment in jobs requiring stronger interpersonal, communications or management skills increased from 49 million to 90 million, or 83%, while jobs requiring higher levels of manual or physical skills changed relatively little.
From 1990 to 2015, employment growth in the U.S. was led by “eds and meds” (105%) and social assistance (99%) sectors while overall employment increased 30% during this period.
To read the report, please go to pewrsr.ch/2dNRp0J.
Pew Study: City Headed in the Right Direction
A new poll from The Pew Charitable Trusts conducted in August 2016 showed that half of those questioned said they see Philadelphia heading in the right direction, while only a third said it is on the wrong track, the most positive results registered since 2009.
Among the groups that opted most heavily for “right direction” were non-Hispanic whites, people 65 and older, college graduates, Center City residents, people with household incomes over $100,000, and those who have lived in Philadelphia 10 years or less, the report noted.
However, when 18- to 34-year-olds were asked whether they expected to still be living in Philadelphia five to 10 years in the future, 48% replied “probably” or “definitely,” down from 59% in 2015. Job and career concerns were the highest rated issues at 23%, followed by education and child rearing at 21%.
To read the report, please go to bit.ly/2dic7ny.
Eds and Meds News
Bond Rating Agencies Boost School District’s Outlook
Moody's Investor Services and Fitch Ratings, Inc. on October 7 upgraded the Philadelphia School District’s outlook from “negative” to “stable,” noting the district’s recently improved financial position, The Philadelphia Inquirer reported. It’s the first boost the district has received since 2010.
The improvement could encourage more investors to consider district bonds in future deals, which could result in lower borrowing costs for the district, the article noted.
To read the article, please go to bit.ly/2dfIjdy.
Two Resignations from SRC
Marjorie Neff, chairwoman of the School Reform Commission (SRC), has resigned effective November 3, and Feather Houstoun, the commission’s longest serving member, also resigned, effective October 14, The Philadelphia Inquirer reported on October 5. The terms of both were to expire in January, and neither was expected to be reappointed.
Governor Wolf this week is expected to appoint to the SRC Estelle B. Richman, who spent three decades in public service in Philadelphia and Harrisburg and recently retired from the U.S. Department of Housing and Urban Development, The Philadelphia Inquirer reported, bit.ly/2dYbHbF.
New commissioners will help negotiate a contract with the Philadelphia Federation of Teachers, which has been without a pact for three years. City Council President Darrell L. Clarke has called for the dissolution of the SRC and return of the school district to local control, bit.ly/2dxOh90.
Englert Named President of Temple University
Richard M. Englert, acting president of Temple University since July, was named president on October 11 by the university’s board of directors, The Philadelphia Inquirer reported.
The board still plans to conduct a search for a new president, but the process probably won't begin until the summer of 2017. Englert has served in various capacities for 40 years at Temple and will not be a candidate in the search.
To read the article, please go to bit.ly/2dlkRvE.
A Look at Philadelphia’s Boom
“Philadelphia Rising,” an article published in Women’s Wear Daily, focuses on Center City and its population growth created by millennials and empty-nesters moving into the city, rising average incomes, and the building boom and influx of out-of-town investors, noting that by 2018, more than 2.8 million square feet of retail will be added to the city.
Currently, prime retail rents are $225/sf for corner space; and west of Broad Street on Chestnut Street, retail rents have doubled in the last five years to $75/sf, the article noted.
To read the article, please go to bit.ly/2e3ZeRM.
Arts and Culture News
Kimmel Center Buys Merriam Theater
The Kimmel Center is expected this week to complete the $11 million purchase of the Merriam Theater from the University of the Arts, The Philadelphia Inquirer reported on Sunday. The performance center will pay for the purchase with $5 million in donations from board members, a $5 million grant from the William Penn Foundation, and a loan.
To read the article, please go to bit.ly/2dVFy0t.
Music Walk Honors Jazz Giants
On Wednesday, October 19, at 11:00 a.m., the Philadelphia Music Alliance will celebrate its 30th anniversary with new inductions, focusing on jazz, to the Philadelphia Music Walk of Fame on Broad Street between Spruce and Walnut Streets, the Philadelphia Daily News reported on October 6.
Among the honorees in the Class of 2016 are Benny Golson and Christian McBride.
Golson was inducted into the International Academy of Jazz Hall of Fame in 2009 and McBride is a five-time Grammy Award winner and artistic director of the Newport Jazz Festival.
To read the article, please go to bit.ly/2dXLvth.
Parks and Open Space News
Rothman Institute Ice Rink Will Open for Third Season
The Rothman Institute Ice Rink at Dilworth Park will reopen for its third season on Friday, November 11, accompanied by the popular Rothman Institute Cabin, opening for its second season.
Admission to the Rothman Rink will be $3 for children 10 and under, $5 for adults, and skate rental will be $10. Hours will be Noon to 9:00 p.m., Monday through Thursday; Noon to 11:00 p.m. on Friday; 11:00 a.m. to 11:00 p.m. on Saturday; and 11:00 a.m. to 8:00 p.m. on Sunday. The Rothman Cabin will offer hot chocolate, beer, wine, French fries, hamburgers and more. Both will remain open until Sunday, February 26, 2017.
Winter at Dilworth Park is presented by Rothman Institute, William Penn Foundation and through generous support from Subaru, Capital One, The Philadelphia Orchestra, Temple University and 6abc.
If you would like to host an event at Dilworth Park, the Rothman Institute Ice Rink or the Rothman Cabin, please contact Sarah Anello at 215.440.5507 or email@example.com. For complete information, please visit dilworthpark.org.
Governor Announces RACP Grant for Schuylkill River Trail
Governor Tom Wolf on October 10 announced a $3 million Redevelopment Assistance Capital Program grant to help fund a $13 million, 2.25-mile extension of the Schuylkill River Trail south to Passyunk Avenue, Philadelphia magazine reported.
The grant will pay for acquisition, remediation, site work, and construction for the first two phases of the project, the article noted. To read the article, please go to bit.ly/2esSux8.
Transportation Fund Grants Announced
Governor Tom Wolf and Secretary Leslie S. Richards on Friday announced 37 highway, bridge, bike and pedestrian projects that will receive $40 million in Multimodal Transportation Fund grants from PennDOT.
Philadelphia was the recipient of four grants, including $911,637 to the Schuylkill River Development Corporation to complete the final phase of construction for the South Street to Christian Street extension of the Schuylkill River Trail; and $811,682 to the City’s Department of Streets for investment in pedestrian and bicyclist safety infrastructure along corridors to three public elementary schools.
To read the press release, please go to bit.ly/2dQsNEH.
Icelandair to Begin Flights from PHL in 2017
Next spring Philadelphia will be getting its first flight to Iceland. Icelandair will begin nonstop service from Philadelphia International Airport (PHL) to Reykjavik, Iceland, on May 30, 2017, The Philadelphia Inquirer reported on October 5.
Icelandair flights will depart PHL on Wednesdays, Fridays, Saturdays and Sundays at 8:35 p.m. arriving the next morning at 6:10 a.m. The return flight will depart Keflavik International Airport at 5:00 p.m., arriving in Philadelphia at 7:15 p.m. on the same day. Flight time will be 5 1/2 hours. Flights were available for booking as of October 5.
To read the article, please go to bit.ly/2cTThSQ.
PENN to Offer Reimbursement for Bike-Commuting Expenses
The University of Pennsylvania (Penn) will add to its employee benefits package a bicycle commuting reimbursement up to $240 annually for bike commuters, beginning in January 2017, to pay for tune-ups, lights, replacement handlebars, etc., Next City reported on October 10.
The federal Bicycle Commuter Act allows employers to offer the bicycle benefit on top of a salary without it being considered taxable income. To read the article, please go to bit.ly/2e2aICx.
Ahmeenah Young Appointed to State Gaming Board
Governor Tom Wolf has appointed Ahmeenah Young, former President and Chief Executive Officer of the Pennsylvania Convention Center Authority to the Pennsylvania Gaming Control Board, The Philadelphia Inquirer reported on October 6.
Young replaces David Woods, who was appointed by Governor Tom Corbett and whose three-year term is expiring.
To read the article, please go to bit.ly/2dyCjg0.
City Has First Director of Complete Streets
Mayor Jim Kenney appointed Kelley Yemen as the City’s first Director of Complete Streets, charged with coordinating vehicle, pedestrian and bicycle traffic, Newsworks reported on October 14.
Yemen will oversee the expansion of programs and initiatives that have a direct impact on safety throughout the city’s transportation systems and more than 2,500 miles of streets.
To read the article, please go to bit.ly/2dQnS6L.
Clarena Tolson to Lead PPA
The Philadelphia Parking Authority (PPA) board on October 13 unanimously selected Clarena Tolson to be interim chief, effective immediately, The Philadelphia Inquirer reported.
Since January, Tolson has served as the City’s Deputy Managing Director for Infrastructure and Transportation and previously served as Commissioner of the Streets Department.
A national search will be conducted to find a permanent executive director, and Tolson will be considered for the permanent job. To read the article, please go to bit.ly/2e1lP1h.
In related news, the PPA board on October 6 voted to raise parking prices at eight PPA-operated garages and lots, effective November 1, Metro Philadelphia reported. The increase will range from $1 to $10 and monthly rates are expected to increase by about $5 to $10. To see the locations and their rate changes, please go to bit.ly/2eBFJk1.
PenTrans Event: Advancing the 30th Street Station District
On Wednesday, October 19, from 4:30 p.m. to 6:30 p.m., PenTrans, the Engineers' Club of Philadelphia and WTS will present Advancing 30th Street Station District: from Planning to Reality at the Courtyard Marriot, 21 North Juniper Street. Check-in and reception begin at 4:30 p.m.; panel discussion, 5:30 p.m.
Featured speakers will be Rina Cutler, Amtrak; Lloyd Sigal, KPF; John Grady, PIDC; and Anne Fadullon, City of Philadelphia.
Tickets are $75 and include drink, ticket, food, networking, and panel discussion. To register, please go to conta.cc/2dLKmsc.
CCD Customer Satisfaction Survey
Please Tell Us What You Think
Each year, the Center City District (CCD) surveys its constituents to measure how well it is performing. We would appreciate your taking the time to respond to this survey. It should take no more than a few minutes to complete. Here’s the survey: ccdsurvey.com.