Philly’s Construction Boom Means Bright Economic Future
As a native Philadelphian, I’m all too familiar with the typical national sentiments surrounding the City of Brotherly Love as a tough, blue-collar town that serves as a layover between Washington, D.C. and New York. For decades, our world-class city dwelled in the shadows of our East Coast neighbors. However, through the city’s prevalent growth, particularly in the construction sector, it’s becoming clear that the economic future is bright.
Throughout my career I’ve heard it said that the pulse of the construction industry is always a solid indication of the state of the economy. If this is the case, then Philadelphia is in an excellent position for continued growth. According to the Center City District, last year 6,686 residential units, nearly 2,000 hotel rooms, close to 2 million square feet of commercial/mixed-use projects and more than 2 million in new retail space came online or was in development, representing a total real estate investment of $6.7 billion.
There are an abundance of wide-ranging construction projects right in the heart of our city including, the Comcast Tower, the largest development in the city’s history, the vast mixed-use East Market development and the $575 million renovation of the The Gallery. Even if you step away from Center City and head north, we see residential projects, restaurants and renovations, including the upcoming restoration of the Divine Lorraine. In addition, Mayor Michael Nutter recently announced a $8.7 million plan to install 41 new street lights from Hamilton Street to Glenwood Avenue on North Broad to illuminate the up-and-coming area at night. All of these incredible initiatives are raising the city’s profile as a great place to live, work and enjoy.
Philadelphia’s construction boom doesn’t stop there. Our world-class universities are expanding and improving their campuses as they continue their efforts to attract the brightest minds from around the country and the world. At Torcon, a region construction industry leader, we’ve been directly involved in several of these expansions, including recent developments at Temple University, the University of Pennsylvania and Villanova University. At Temple, the Goldenberg Group developed The View at Montgomery, a LEED silver, 313,000-square-foot student housing project that added 832 beds last year, and the building has received rave reviews from students. Meanwhile Penn restored its Arts, Research and Culture (ARCH) building into a vibrant community hub in the center of campus. The addition of these state-of-the-art academic facilities is corresponding with a sharp rise in the millennial population within Philadelphia. It appears that these Philly-based universities are helping to not only attract, but to also retain these young, bright minds as they help create a unique Philadelphia experience.
The healthcare sector is working in tandem with the growth of Philadelphia as we continue to see cutting-edge medical facilities popping up to offer advanced healthcare, provide jobs to promising individuals and to serve as hubs for research and innovation. These medical institutions have likewise taken steps to upgrade their infrastructure in recent years. In 2014, Torcon began working with St. Christopher’s Hospital for Children on its $110 million expansion project which includes the ongoing construction of a new 135,000-square-foot Pediatric Critical Care Tower and the opening of the 30,000-square-foot Center for the Urban Child, which provides children with access to services that address social needs in real time. Other Philadelphia healthcare centers such as Thomas Jefferson University Hospital and the Children’s Hospital of Philadelphia have upgraded their facilities and operating rooms with the latest technology and medical equipment available.
Along with all of this exciting construction growth, the largest metro to metro migration in the United States consists of people leaving New York City for the Greater Philadelphia Area. Such influxes of new residents are generating excitement and buzz as Philadelphia builds on its already strong urban and cultural foundation. Even Philadelphia’s commercial office space, long in retreat with 7 million square feet of space shed in the last 25 years, is seeing a resurgence as occupancy rates have dropped below 10 percent this year. That signals significant improvement from the five-year high of 13.5 percent in 2010. With the Comcast Innovation and Technology Center adding 1.29 million square feet of world-class office space, already fully leased by Comcast, and the FMC Tower by 30th Street Station planning an additional 635,000 square feet of commercial space, Philadelphia is well-positioned to attract businesses from surrounding areas.
The city is having its moment in the sun and our developers and institutions are putting the necessary infrastructure in place to support its growing and diverse population base as all signs are pointing to continued strong construction growth.
With funding for construction projects pouring in from around the country, the explosion of investment signals that our peers are finally seeing Philadelphia as a global city — one that hosted Pope Francis’ historic visit. Not skipping a beat, the positive momentum will continue with the Forbes “30 Under 30” Summit arriving on October 4th and the Democratic National Convention coming to town next July.
It’s an incredibly exciting time to be a Philadelphian and I couldn’t be more proud about it.
Mike Armento, is the senior vice president of Torcon.