Citing rising construction costs, a developer has bailed on a residential tower project slated for a parking lot on 709 Chestnut Street.
The Philadelphia Inquirer reports that Mack-Cali Realty Corp., a New Jersey-based developer, has paid $800,000 to get out of a deal with Parkway Corp. to build a 32-story residential tower at 7th and Chestnut:
Philadelphia "had a great move in rents, but we didn't think that was going to continue and costs were going up," Marshall B. Tycher, chairman of Roseland Residential, said during the call.
Plans to build the 300-unit residential tower were first announced in March 2015, a time when Market East was beginning its re-development boom with developers like Keystone Property Group and National Real Estate Development buying up properties left and right.
In general, the city has been in the midst of a building boom, and was recently named the top city for walkable new construction. And since 2014, 70 percent of apartment construction in Philadelphia has been on the high-end.
Yet Jacob Adelman writes that Mack-Cali Realty Corp.’s decision to drop the project may be a sign that Philly’s apartment boom may be slowing down, at least for out-of-town developers who may have a hard time "making their numbers" with rising construction and labor costs and increase of supply.