Philadelphia’s Center City real estate development is starting to revive, but it may be hard to see.
“Steel is actually going up. There’s actually a tower crane on top of an office site in Center City Philadelphia, exciting to see after an absence of several years,” says John Gattuso, the regional director of Liberty Property Trust.
The Malvern-based company has smaller projects in play than in the past, but Gattuso says an office tower going up on top of an existing building at Eighth and Walnut streets is an example of the recovery of the real estate market — especially for office space.
The University of Pennsylvania Health System will fill the entire tower. Gattuso said universities and hospitals have helped to anchor growth. On the whole, presenters Wednesday at a meeting of the Central Philadelphia Development Corporation expressed enthusiasm about the growth of Center City amenities such as restaurants.
They did have some reservations about competition with the suburbs.
“Despite the great growth, because we keep converting what we’re not using, we have the same amount of occupied office space in Center City that we did in 1990,” says Paul Levy, chief executive of the Center City District.
Over the last decade, suburban development has outpaced urban development, he said, “5.2 times the amount of development delivered in Center City despite being only a 38 percent larger market.”
Philadelphia came through the recession well, Levy said, but the city has to keep its momentum going.
Liberty Property Trusts recently voted for an urban future with its feet. The company sold almost $200 million worth of suburban office parks on the East Coast and in Wisconsin to a New York firm.
The sale included the Marlton Executive Park in Marlton, N.J., and the Horizon Corporate Center in Mount Laurel, N.J..