Before the pandemic, Philadelphia was experiencing a renaissance. Young professionals, families, and artists were drawn to its diverse neighborhoods, cultural attractions, and thriving job market. However, the pandemic prompted a significant shift toward the suburbs, and developers followed the rapidly changing demand. Three years later, this shift is dissolving almost as quickly as it started. Job opportunity and vibrant activity is moving back toward the city; but with that said, people’s desire for the tranquility and space the suburbs offer still remains. For local real estate developers and marketers, the key to drawing buyers and renters back in may be to reframe the Philadelphia living experience as the best of both worlds: urban convenience and suburban amenities.
Bisnow’s “Philadelphia State of the Market” event last month highlighted the boom in demand for mixed-use spaces that can cater to the evolving job market. Previously undeveloped areas such as the Navy Yard and the Delaware River waterfront are primed for not only residential spaces but also coworking offices, converted restaurant and retail spaces, and accommodations for new job industries such as life sciences. Alongside job expansion, the young professional market is showing growth at very high rates, which (coupled with current purchasing difficulties for the average buyer) is contributing to the continuation of a healthy rental market in the area.
These demand shifts provide unique opportunities for developers to buy into the dip the market is experiencing, and to develop across both new and familiar areas in order to create a living environment Philadelphians know we want, but may not know we have. When Grafik developed the brand identity and marketing strategy for Northbank, a 35-acre development along the Delaware River, we encouraged prospective residents to “rediscover the river” and take advantage of the neighborhood’s unique combination of waterfront amenities and close proximity to vibrant urban areas.
Investment capital stacks have also shifted but are just as consistent, and Philly as an investment platform is viewed largely as stable contrary to the recent volatility post pandemic. The opportunity is still present for healthy margins, there’s just a shift toward private and added international investors. These unique forms of investment and the rates for new build loans put strain on developers. However, the rate of convertible properties, combined with Philadelphia’s rich industrial history make for another unique opportunity. Converting old warehouses and factories across the city capitalizes on the industrial design and loft apartment buzz that doesn’t show signs of fading anytime soon.
As more developers turn their attention back to the city, place branding and localized, experience-centric marketing tactics are vital ways to grasp attention and lead suburbanites back toward what they loved about Philly in the first place. And communicating a message of safety, security, and excitement, as Grafik has done through our place branding work in D.C.’s Buzzard Point, will be vital in Philadelphia as well.