It’s clear the buzz about Market East won’t let up anytime soon. We still haven’t come down from the news that the area is getting a Wawa, City Fitness and Iron Hill Brewery next year; and now, real estate services firm JLL says the burgeoning Market East is the most affordable and desirable retail corridor in the country.
In its first ever City Retail report, JLL ranked the country’s most affordable and desirable prime urban retail corridors based on an average of each location’s annual asking rent per square foot. Retailers looking to expand better look at Philly: Market East’s average asking prime retail rent is $50 per square foot, more affordable than Chicago’s Wicker Park and Seattle’s Pike Street, which were ranked second and third on the list of ten locales.
“Market East emerged at the top of the pile because we’re seeing significant reinvestment in the retail destination that was once the heart of Philly shopping,” Lauren Gilchrist, JLL vice president of research told me. The corridor’s been long anchored by Macy’s and Wanamaker’s before that, but it languished because of blighted buildings, vacant lots and “a failed inward-facing mall,” according to the report.
But between 2017 and 2019, the area has nearly one million square feet of new or renovated retail space that’ll be delivered, much of which is being orchestrated by National Development’s East Market project. Other tenants moving in include MOM’s Organic Market and Design Within Reach and the renovation of The Gallery into the Fashion Outlets of Philadelphia is still in the works. The area also welcomed Center City’s first Target last summer, also the retailer’s first urban small-format store in the region.
Gilchrist says rents are expected to increase once Market East solidifies as a major retail hub. “Things are only beginning to reemerge there and that keeps the rents lower but in a couple of years it’s likely to be just as expensive as these more evolved retail areas on the list,” she said.
Global real estate firm CBRE also just dropped some new research that puts Philly’s retail landscape in favorable light. The study analyzed target markets for international retailers, and found that Philadelphia has “carved out a place in the global retail conversation over the past few years.”
With the introduction of new global and national retailers like Italian furniture company Natuzzi Italia, British clothing brand Superdry, and apparel company Under Armor, Philly’s “enhanced reputation as a retail destination will continue to grow in 2017,” the report says, citing drivers like Philly’s swelling millennial population, nationally acclaimed food scene, substantial recent job growth and “diverse and distinctive” neighborhoods.
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