Philadelphia, PA — Philadelphia’s multi-family housing stock is performing at a year-over-year high for effective rents/low for vacancy rates while also recording strong absorption of new product metrowide, according to the brokerage professionals at Gebroe-Hammer Associates. As a result, investment appetite is skyrocketing in the city where the firm, led by Senior vice president Eli Rosen, has arranged the trades of over 1,070 units during the past six months. Sales totaled in excess of $97.63 million.
“Philadelphia is a melting pot of property classes, ranging from newly constructed luxury hi-rise buildings to existing post-World War II mid-rise buildings that have been renovated through the years and are poised for repositioning,” said Rosen, who represents prominent investors and developers throughout the metro Philadelphia market and its outlying suburbs. “The city as a whole has experienced an annual increase in effective rents with record-breaking growth every quarter since the first quarter of 2010. Monthly effective rents are now at about 4% over last year alone, with some neighborhoods like Center City performing better than ever.”
The Center City submarket, which dominates the city’s skyline, is widely acknowledged as one of the most vibrant downtowns in the United States with a residential population that is second only to Midtown Manhattan. According to REIS, Center City’s year-over-year effective rent increase was 5.3%. Its numerous neighborhoods have evolved dramatically from an industrial haven into a creative, hip enclave for recent college graduates putting down roots in the city as well as millennials and retirees.
Similarly, Northwest Philadelphia also has undergone a multi-family boom laying the groundwork for neighborhood gentrification, noted Rosen. Recent multi-family transaction highlights include the $24.5 million sale of Chestnut Hill Tower. Rosen, along with managing director Joseph Brecher, recently represented the seller and buyer in the trade of the 240-unit modern hi-rise tower located at 7600 Stenton Ave.
The property, which was acquired by the seller in 2012 for $17 million in a transaction also arranged by Gebroe-Hammer, was repositioned through capital improvements during the past three years. The 18-story property now features hardwood flooring, modern cabinetry and the addition of high-end finishes. It is close to the train, offering a direct link to downtown Philadelphia.
In addition to Chestnut Hill Tower, Rosen arranged the two separate sales of 64 units at Airy Avenue Apartments, a garden-apartment complex in East Mount Airy, and 40 units at Walnut Park Apartments in the West Mount Airy neighborhood.
“Renting remains the mass-majority preference of a tenant base that transcends three different generations – from millennials to retirees,” said the area market specialist. “Apartment living is no longer dictated by income. It is a choice driven by a desire to avoid mortgage payments and home maintenance costs while having immediate access to job opportunities, mass transit, dining, arts and culture.”
Rosen also noted another area in which Gebroe-Hammer has been active is the Temple University Hospital district, where he has sold 102 units in the past six months. The teaching hospital is a 728-bed general medical and surgical trauma center. It serves as the chief clinical training site for the Temple University School of Medicine.
Additional transactions arranged by the Rosen/Brecher team include the sale of 181 total units in Northeast Philadelphia; the $20 million sale of several garden-apartment complexes in Montgomery County; and the trade of 120 units in Bucks County.
Gebroe-Hammer is one of the most active multi-family investment sales brokerage firms within the Philadelphia/New Jersey/New York State corridor. The firm’s brokerage activities concentrate on suburban and urban high-rise and garden-apartment properties throughout the Northeast and nationally. Gebroe-Hammer also markets mixed-use and free-standing office and retail properties. Widely recognized for its consistent sales performance, the firm is a 10-time CoStar Power Broker.