It has been a big, nay, huge year for Philly’s real estate and development scene. Home prices hit an all-time high since the housing bust, 30-plus high-rises are currently under construction or being renovated, walkable new construction is rampant, and the end of 2016 is still months away.
"It’s fascinating," says John Calarco, owner of MGC Real Estate Group. "I’ve been here for 20 years, and it’s amazing how much the city has grown."
And it’s still growing. Next year is poised to be another big one, especially up and down Broad Street, Grays Ferry, Kensington, and Market East. Why these five? Curbed Philly talked to real estate and development experts like Calarco who gave a long list of reasons, but they’re either on the cusp of revitalization, seeing an increase of density via apartments or housing, and, for better or worse, experiencing a hike in real estate values.
The boom of North Broad is apparent as soon as one passes City Hall. Hanover North Broad, a mixed-use development consisting of two apartment buildings at the corners of Broad and Callowhill, has been rising since breaking ground earlier this year, and will serve as the gateway to North Broad when it opens in 2017.
"It has the opportunity to be transformative," Hanover’s Adam Harbin said at the groundbreaking in February.
Meanwhile, developer Eric Blumenfeld has been buying and fixing up historic properties on North Broad for years, from the Mural Arts Lofts to the Metropolitan Opera House to, of course, the ongoing $40M+ Divine Lorraine restoration. The historic apartment building is expected to finish up next year, and the re-lighting of its iconic signs will undoubtedly serve as a symbol of North Broad’s ongoing transition.
South Broad has potential to become a "world-class street," says developer Carl Dranoff, who got the ball rolling in this area with the Symphony House in 2007.
Today, there are multiple hotels under construction or in the works nearby, including the Cambria Hotel and Dranoff’s impending SLS International Hotel, which at 45 stories will be the tallest residential building in the state.
Meanwhile, the developers have moved even further down South Broad toward Washington Avenue. At that corner, two long-vacant lots will be transformed into mixed-use developments, including the Lincoln Square mixed-use, which is expected to break ground next year.
"I think the story the next decade will be where South Philly meets Center City," says Dranoff. "You’re seeing the boundaries of Center City going south and the boundaries of South Philadelphia going north—they kind of meet at Washington Avenue."
It was only a matter of time before Fishtown’s popularity spilled over into Kensington. Historically, the neighborhood has been mostly industrial, and today developers are eyeing its old warehouses and vacant lots for loft conversions and new builds.
"The supply has been dwindling because so many developers have bought it up," says Calarco, whose company manages numerous properties in South Kensington.
Low inventory means hiked housing prices. Since last year, the average house price in the Kensington/Frankford area has appreciated 9.5 percent, according to Drexel’s Lindy Institute. At South Square, a new 19-townhouse development managed by MGC, the asking price increased from the low $400Ks to $450,000 in the last five months.
Even affordable vacant lots are harder to come by. Calarco says he’s seen the average price of vacant lots more than double in the last few years, rising from $40,000 to $90,000 and up.
In addition to residential, retail and restaurants have popped up along Front Street, and "Techadelphia," another innovation co-working space, is poised for American Street.
"It’s becoming a village unto itself," says real estate agent Michael McCann.
But it’s not just millennials who are drawn to the neighborhood. McCann says many of his clients also include empty nesters from the Main Line who can actually afford to build $400K+ homes in Kensington. "You just can’t get new construction in Rittenhouse and Society Hill unless you spend $2.5 million," McCann says.
Development is rampant east of Market Street, where the $600+ million East Market mixed-use project is quickly rising. "I think that Market East is the culmination of many years of efforts to reverse blight and bring to new uses and energy to the east side of Market Street," says Dranoff.
Not only will the East Market development include the first Mom’s Organic Market location in Philly and be home to the future Design Center of Philadelphia, but there will be not one, but two apartment towers. Across the street, construction has begun at the Gallery Mall, which will become the $575 million Fashion Outlets of Philadelphia, spanning three city blocks.
Given its prominent location, adds Dranoff, Market East is poised to become a "connective tissue" between Center City and the historic sites in Old City.
As the University of Pennsylvania expands its campus into Grays Ferry with Pennovation, its eds and meds community is sure to follow. The neighborhood, which sits on the southwest edge of the Schuylkill River, has already seen signs of development in the form of rehabbed homes—it’s considered one of the top zip codes in the nation for house flipping.
"Pennovation is going to be a new anchor and everything will fill in the donut hole between Grays Ferry and Pennovation," suggests Dranoff, whose high-rise One Riverside on the Schuylkill River Trail looks out to Grays Ferry.
In addition, Penn’s mortgage assistance program has expanded to the neighborhood, which means university employees now have access to loans if they wish to buy in Grays Ferry, where property averages just $130 per square foot—the most affordable in the city.
A mixed-use development has also been proposed for the corner of 25th and Washington Avenue, featuring single-family homes and multi-unit dwellings. Though still in the design process, the goal of the project is to increase walkability in the area.
"I look at Grays Ferry and say that it’s the new bullseye," says Dranoff, "because the boardwalk is being extended. People will be able to easily walk, bike, jog, dog sled, whatever, between Center City and Grays Ferry."