Oversaturation in Philadelphia?

Question

Interesting article on philly.com about the huge number of commercial units available and coming online in the next couple of years:

http://www.philly.com/philly/hp/news_update/326517...

Combined with a net negative migration out of the city last year, I'm wondering if Philly would be a bad area to look for an investment property, despite the "get your first rental unit in your own backyard" guidance often given.

Is anyone able to provide any advice on this?

Mary B. · Answer

Here's an article talking about upcoming commercial projects coming to Center City

http://articles.philly.com/2015-08-21/business/656...

Of course you can walk down Chestnut St and see the many vacant commercial storefronts currently. Residential is much more in demand then commercial properties right now in Phila.  This article talks about one property development company selling an acre of Center City commercially zoned property > http://articles.philly.com/2015-07-16/news/6445444...

Another article on hotels being revamped in Philadelphia and surround suburbs

http://www.cpexecutive.com/cities/philadelphia/rev...

Brandywine Realty Trust is building a 45 story mixed-used office / residential building right now at 30th & Walnut Sts. There is plenty of development projects going on about town. I think you will find that due to many people returning to city living in lieu of the suburbs many developers are racing to cater to them. Additionally Phila has a high percentage of its housing being 80 years of age and up. That's why much of the abandoned houses were torn down in Northern Liberties, Spring Garden etc. There are plenty of lots in their places. Its not just about gentrification. The properties are old - housing demand is up.

Its a lot of politics involved with becoming a commercial investor to be reckoned with in any big city and there are many big players in town already each dominating particular sections of the city.  You might want to attend some council and mayoral functions, donate to their favorite charities...you know they say you have to pay to play. My coin.

Kudos,

Mary

Garrett F. · Answer

I'd encourage you to study more then just one article to make any decisions. The best way to minimize losses is to really know your area and market inside and out

Garrett

Anthony Gatt · Answer

Great perspectives!  I appreciate all of the constructive feedback.

Dan Zitofsky · Answer

my best advice is to drive the market and talk to people. I started off years ago in areas like west philly, port richmond and moved all the way into center city. You have to move quick n Philly and now I am creating my own rental market by developing rental properties from old warehouses, etc in areas that have a demand. As Garrett and Joe mentioned I wouldn't base it off an article or just a certain area. Best of luck in your endeavors and glad to help always.

Dan

Drew Palmer · Answer

From a buy and hold multi family perspective I personally think there is over-saturation in the "expensive" apartments - 2000/mo and up.   Philly is not NYC in terms of unlimited appetite for high end apartments.

Joseph Scorese · Answer

Plenty of aspiring neighborhoods to buy and flip or buy and hold with cash flow. Need to expand your power team if you are not finding anything. Regards, Joe Scorese

Oversaturation in Philadelphia?

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