|The view from 500 Walnut | Philadelphia, PA|
Let’s start this one off with a few examples.
When someone uses the term “luxury” to describe clothing, you probably have certain brands that come to mind. For me, I think of Burberry, Louis Vuitton, etc.
When someone uses luxury to describe cars, you probably have certain brands that come to mind as well. For me, they are Porsche, Bentley, etc.
When someone uses luxury to describe real estate, what comes to mind? For me, it’s cities like New York, LA, Chicago, and DC. For sellers of luxury real estate in those aforementioned cities, that’s where buyers have the option to spend $10M, $20M, or even $50M+ on their next home; or maybe, their home-away-from-home (aka pied-a-terre).
That’s how much “luxury” real estate runs for the super-rich today.
But what if I told you that Philadelphia, as a city, was now aggressively trying to compete for those same luxury home buyers? I mean if anything, why not start with buyers in New York? Philadelphia is a short 90 mile commute, and a lot more reasonable in the price department. Oh yeah, and the last time I checked, it only takes a little over 1 hour to commute from 30th St Station (Philadelphia) to Penn Station (New York) on Amtrak’s Acela Express; that’s totally doable for those who want to live in Philly and still maintain their job in NYC.
Hey, I’m just stating the obvious here.
Today, for a luxury home buyer in New York City, he/she has the option to spend $85M on a condo in Manhattan; that is based on a general search I did today on Realtor.com. I’m sure there are even more expensive options than that one, listed privately of course.
Seriously, 85 … million … dollars!
Holy sh*t, that condo actually exists? Yes it does, my friends. And to an extremely wealthy luxury buyer, who only wants the best in life, money is no object when it comes to high-end real estate.
Now, let’s look at Philadelphia.
Today, for a luxury home buyer in Philadelphia, he/she has the option to spend either $15M on a mansion in Rittenhouse Square, or $6.9M on a condo at 1706 Rittenhouse; that is based on another general search I did today on Realtor.com.
As for more expensive options in Philadelphia (again, listed privately), records are about to be broken at one of Center City’s newest projects: 500 Walnut.
The most coveted of the 2 penthouse options at 500 Walnut: $17.6M (… or so I have heard/read). In my professional opinion, that is where Philadelphia is looking to go as a city.
And why shouldn’t we?
Philadelphia has world-class amenities: the arts, museums, historic sites/architecture, high-end dining/shopping, and some of the top companies and universities in the world (Hello, Comcast + UPenn). Plus, Philadelphia has a top-notch location, right in between 2 of the most expensive places to live in the US (as well as the world): New York + DC.
So if our city can attract world-class residents, we should have world-class real estate opportunities … right?
Aside from past projects completed during the last housing boom, such as 1706 Rittenhouse, The Ayer, and The Residences at The Ritz Carlton, Philadelphia proper did not have much of a demand for luxury real estate. All of our area’s most luxurious real estate options were located in the suburbs (e.g. Main Line, Bucks/Chester County, etc).
And so with this post, the luxury real estate movement starts to take shape in the City of Brotherly Love & Sisterly Affection.
Now that Center City is experiencing a shortage of real estate supply, mostly in the condo department (To All Sellers, This is good news for you!), new projects are already starting to pop up and meet demand: One Riverside, The Residence at Twelve40, etc.
It will be interesting to see how Philadelphia’s luxury sector performs over the next few years, as the local real estate market starts to heat up.