Could Comcast’s New Tower Hurt the Commercial Real Estate Market?
The New York Times today examines what Comcast’s giant new tower might mean for the Philadelphia commercial real estate market. Maybe nothing—“It just shows there is significant demand in the marketplace,” one expert is quoted as saying—but maybe something:
But David M. Scolnic, a real estate lawyer with the Philadelphia firm of Hangley Aronchick Segal Pudlin & Schiller, said the new supply would be likely to stabilize or even drive down rents, as well as shift perceptions about what constituted a “trophy” building in the city.
While the new building and the existing Comcast headquarters will be sought after as prestigious corporate locations, others with older facilities are likely to lose their appeal as the most desirable premises, Mr. Scolnic predicted.
“Observers believe that there’s a shortage of large blocks of space in those buildings,” he said. “I think that’s exaggerated, and I think this building will bring people back to reality because there is a general contraction still of big users of those spaces and there are now quite a lot of floors being made available.”
For example, he predicted rents would come under pressure in one building, currently seen as being in the “trophy” category, where Comcast has some of its employees. They will be moving out when the new offices are built.
“It’s going to put pressure on those landlords to get more realistic about some of their expectations,” Mr. Scolnic said.
Still, the Times says, the new building should “encourage boosters of a city that has long harbored an inferiority complex” to New York and Washington.