Category ritz

Philadelphia’s housing stock gets a boost in “luxury”

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?

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.

Two luxury hotels will bring more life to the area around “Centre Square”

 
So, what the heck is Centre Square, you may ask? Well, it’s actually the original name given to where City Hall sits today.

When Billy P (aka William Penn) founded Philadelphia back in 1682, he created one of the first major grid systems in the US. The purpose of using a grid plan was to create wide streets (which are considered narrow today) with right angles, for ease of planning and to avoid overcrowding. The planning aspect definitely held up, but overcrowding did not; just like it did not in New York, Boston, etc.

Anyway, with Billy P’s master grid plan also came Philadelphia’s 5 Original Squares: 1) Southwest Square, 2) Northwest Square, 3) Southeast Square, 4) Northeast Square, and 5) Centre Square. You now know them today as: 1) Rittenhouse Square, 2) Logan Square, 3) Washington Square, 4) Franklin Square, and 5) Philadelphia City Hall.

There’s your free history lesson for the day, and from someone who is not certified to teach it.

Okay, back to the luxury hotel project at 15th St & Chestnut St.

If you are not familiar with where this is exactly, it’s the surface parking lot directly behind the Ritz Carlton Residences (just across from City Hall). The parcel sits on the northeast corner of 15th & Chestnut, to be exact.

The reason I feel that this project is significant is not just for tourism, but for everyday street life. It fills a missing gap in a busy Center City block (surface parking lots are very 1980s these days), makes great use of density/scale, brings 2 new names in luxury hotel living to Philadelphia, and will have ground floor retail for all to enjoy.

And since Philadelphia has gotten better at planning over the past few years, with the new zoning code and all, it appears that most developers are putting forth projects that offer “smarter” features (e.g. mixed-use, underground parking, sustainable design, etc).

Now that Dilworth Plaza Park plans to cut the ribbon on 9/4, Centre Square City Hall will now have a suitable public space for both residents and tourists alike. Just like it was intended to, over 300 years ago.