Philadelphia Multifamily Report – Fall 2019
Rents in the metro rose 3.7 percent year-over-year through August, outpacing the 3.3 percent U.S. rate.
Philadelphia’s multifamily market is expanding, sustained by steady economic and population growth. Despite consistent levels of new supply in recent years, occupancy has remained in a tight band, standing at 95.8 percent as of July, unchanged year-over-year and above the 95.1 percent national average.
Education and health services led employment gains as of June (9,900 jobs). Life sciences and health-care research are growing, with several projects on tap, including a $500 million, 1.6 million-square-foot coworking campus The Discovery Labs is creating in King of Prussia solely for health-care, life sciences and tech businesses. Penn Medicine’s $1.5 billion patient pavilion, an extension of the nation’s oldest teaching hospital, is also underway, while Ventas and Wexford Science & Technology are building The College of Nursing and Health Professions for Drexel University in University City. Following record tourism activity last year, leisure and hospitality gained 8,700 jobs, while construction grew by 8,200 positions.
Investment and development activity has moderated in 2019 compared to last year, with $900 million in total sales and 1,058 units coming online through August, while another 12,600 units were underway. Continued demand is expected to boost absorption, and we expect the average Philadelphia rent to advance 4.4 percent for the whole of 2019.