Inside Philadelphia’s Multifamily Market

5 min read

Equus Capital’s Joseph Mullen discusses what’s driving growth in the metro.

Joe Mullen, President, Madison Apartment Group. Image courtesy of Equus Capital Partners

Philadelphia’s multifamily sector showed a great deal of resilience in the face of the health crisis and continued to recover during 2021. Thanks to strengthening economic fundamentals—driven largely by the metro’s expanding life sciences sector—both developers and investors are taking note of the opportunities the market can offer.

To find out more about Philadelphia’s multifamily landscape, Multi-Housing News reached out to Joseph Mullen, president of Madison Apartment Group—the multifamily management affiliate of Equus Capital Partners. Equus Capital’s Philadelphia portfolio currently encompasses 1,790 rental units, including projects under construction and in the planning stages, according to Yardi Matrix data. Below, Mullen highlights some of the factors that make Philadelphia an attractive multifamily market.

Multifamily fundamentals have significantly improved over the past year in the metro. Do you expect this upward trajectory to continue this year?

Mullen: The majority of our portfolio is in the suburban Philadelphia market, which did not experience the kind of downturn seen in the urban Philadelphia markets. Occupancy and collections remained relatively strong since the onset of the pandemic and rent growth has been significant since early 2021. We expect strong fundamentals to continue. Rent growth may slow down but will remain strong relative to historic levels.

Are there any risks that might offset this recovery? 

Mullen: The rise in interest rates may have a short-term negative impact on property value, however, we believe fundamentals will remain strong. Even as folks begin to move back to the urban core, the desire of Millennials to start families and move to more suburban settings will more than offset the population looking to move back into the city.

Which submarkets/neighborhoods are you most interested in? 

Mullen: We look for neighborhoods with good school systems, proximity to highways and a good employment base, along with easy access to retail and various local amenities. We are currently building in Newtown Square and Conshohocken and have a development pipeline in Bucks County—these locations have strong fundamentals, and we believe will continue to perform well.

Investment activity picked up last year and almost reached pre-pandemic levels. How do you see investment activity unfold in the upcoming quarters?

Mullen: With the historically large amount of capital available for deployment within the multifamily sector, along with the strong operating fundamentals over the prior 12-month period, we believe the investment sales activity will remain strong over the coming quarters.

We are consistently in the market, both as buyers and as sellers, and have been continually amazed at the velocity of investment activity. Each asset appears to be achieving record pricing upon sale in addition to sellers having their pick amongst countless well-qualified buyers.

From our conversations with investment capital, we foresee their voracious appetite for apartment investment will continue over the next few years.

What types of multifamily assets are the most sought after by multifamily investors?

Madison Apartments at Ellis Preserve in Philadelphia
Madison Apartments at Ellis Preserve, a 252-unit property in suburban Philadelphia owned by Equus Capital Partners and managed by Madison Apartment Group

Mullen: We are developing new assets but also analyzing existing properties and sometimes those worlds blend for us—either as we buy an older property and look to upgrade it physically, or as we look at newer assets and look to increase value through improved operations.

Both asset types seem to be incredibly sought-after, especially in strong suburban locations. While we believe the urban recovery is already in full swing, there is always going to be a large subset of renters who will prefer suburban living. Therefore, we believe demand on the renter side for our target locations and assets will be tremendous for the foreseeable future.

Philadelphia is rapidly expanding into a major life sciences cluster. How do you expect this growth to impact multifamily development in the future?

Mullen: Generally speaking, a growing employment base bodes well for multifamily demand. We are excited to see the continued growth within this sector as it will bring well-qualified renters to the population. We continually target locations where health care is a driver of the local economy due to the relative stickiness and endurance of those jobs through downturns. We view life sciences as a welcome addition to the already strong eds and meds population of the Philadelphia market that we love providing housing to.


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As most companies have embraced the remote or hybrid work culture, the work-from-home model seems to be here to stay. How have you adapted your communities to enhance the work-from-home experience?

Mullen: Many of our communities have clubhouses with various spaces to work. We have found that many residents enjoy having the option of working in a slightly different environment outside of their home. This is a trend we expect to continue and have been very cognizant of this trend with our new ground-up development.

Within our newer developments, the clubhouses will have ample space for the remote working residents—expanded business centers will have conference rooms, workstations, private workstations and private offices, all with computer monitors to plug laptops into. Additionally, our new clubhouses will be very spacious, with a variety of different seating areas as additional space where residents could potentially also work from.

What are your expectations for the housing market this year? 

Mullen: The housing market will continue to perform well in 2022. The growth rates experienced in 2021 to all-time high levels of pricing for multifamily rentals may slow slightly in 2022 but, overall, we believe they will remain strong relative to historical levels.

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