Why Invest In Philadelphia?
Philadelphia hosts a 2.9% vacancy rate in the city, meaning there is a HIGH demand for rental properties.
Philadelphia’s housing market and accessibility to major cities like New York and Washington, DC, makes it a hot market to invest.
The 6th largest city in the country comes with a lot of added perks; plenty of nightlife, adult and children entertainment, dining and leisure.
A hub for Fortune 500 companies and a top city for the Amazon H2 bid, Philadelphia’s economy is booming and is attracting more millennial than any other US city.
Philadelphia listed only 3,329 home for sale at the end of 2017 Q4. With fewer homes for sale, the demand has increased.
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In The News
Suddenly, Philadelphia has become a model city, with a Super Bowl-winning (and Trump-defying) NFL team and a new radical political class. Oh, and Meek Mill is finally free. We asked some of our favorite locals why they’re celebrating 2018.
Mr. Christopher used to live in Chelsea and work in Hoboken before migrating to Philadelphia, where he rented an apartment for half the price and watched his business blossom at Bok, a full-square-block complex that bustles with all manner of commercial enterprises, among them letterpressers and photographers, a hatmaker and a boxing school. Prospective tenants from New York are calling about moving into the retrofitted school, according to the leasing manager. And the Italian sportswear company Diadora recently signed a contract to relocate its North American headquarters there from Midtown Manhattan. “One thing I like about Philly is it’s a bit slower paced,” Mr. Christopher said. “You do feel like you can slow down, and enjoy yourself a bit more.”
This New York-Philadelphia migration, fueled by a quest for cheaper living, has long existed. But this is not just the same story of young artisans priced out of Chelsea. There’s another kind of New York transplant spreading out into Philadelphia.
Down the street from Bok, Kin Yeung finished prayers at Zhen Ru Temple and told a parallel story. She lived in New York’s Chinatown in 2003, regularly visiting Philadelphia to attend this Chinese Buddhist temple in two modified rowhouses. She soon saved enough money from her jobs in restaurants in New York to ditch her East Broadway walk-up to buy a house in Philadelphia. A second home soon followed, and now she’s a landlord for five properties, often renting to New York ex-pats. “The houses in Chinatown are too small and little and old,” Mrs. Yeung said, describing how eight people live in her old two-bedroom apartment. “New York City right now — they cannot afford the rent. Too expensive. No one can live there.”
And it’s not just the housing. Back in New York, a bag of bok choy cost as much as 89 cents. “And here I get it for 39 cents!” she said. Perhaps the best perk: In the yard of her home in Philadelphia, Mrs. Yeung has space for a vegetable garden.
Mrs. Yeung is part of a quiet wave of immigrants who stop for a few months or several years in New York before finding a more manageable city an hour and 45 minutes down the New Jersey Turnpike. These foreign-born ex-New Yorkers are enlivening Philadelphia’s businesses, restaurants and neighborhoods with a diversity only now beginning to come into focus.
The number of residents born abroad has increased 69 percent in Philadelphia since 2000, according to a study by the Pew Charitable Trusts, and immigrants now amount to nearly one-fifth of the city’s work force. Many arrived via New York.
Bok is topped by two rooftop bars with dynamite views of the surrounding rowhouse neighborhood, where, in a scene straight out of “Rocky,” vendors at the outdoor Italian Market still burn cardboard in garbage cans for heat in the winter. But scattered throughout that old Italian community are a dozen taquerias and an estimated 20,000 Mexican residents. In much the same way, West African immigrants are now dining at halal restaurants in West Philadelphia and Russians are buying delicacies at the Brooklyn-based Eastern European supermarket NetCost, in the Bustleton neighborhood.
Northeast Philadelphia — an expansive region with strip malls and lawns that New Yorkers might recognize as a relative of Staten Island — is Pearl Huynh’s territory. A majority of the estimated 2,000 Chinese who are members of a new group she founded, the Northeast Philadelphia Chinese Association, migrated from New York City. Ms. Huynh was born in Vietnam to Chinese parents.
She has lived on Long Island, in Flushing, Queens, and in Chinatown, working as a software developer on Wall Street. Laid off in 2010, she moved to Philadelphia to be near family and began a new life owning and renting properties — and working as a volunteer, helping the legions of Chinese new to the city.
“I see many of them moving down from New York, and they’re kind of low-income and have language challenges,” she said. So every morning Ms. Huynh sends messages to her members via WeChat, a Chinese messaging service, with YouTube English language lessons and announcements about neighborhood events and national holidays. She also educates them on the zoning rules regarding private gardens, and translates their mail during drop-in hours at the local library. Ms. Huynh said she had already helped eight Chinese renters from New York apply for a Philadelphia property-tax exemption that enabled them to be first-time home buyers. According to Pew, a majority of Philadelphia immigrants are actually homeowners, compared with an average of 37 percent across a selection of other cities.
“It’s like a flow of immigrants come from New York,” Ms. Huynh said. “I’m really proud I’m able to help them.”
Sylva Senat, who comes from Haiti by way of Brooklyn, can witness this renaissance from the roof deck at Maison 208, his sleek French-inspired restaurant and lounge. Mr. Senat fell for food when he took a culinary class at John Dewey High School in Gravesend that turned into an internship at Sign of the Dove, the former Upper East Side hot spot. He went on to become sous chef at Jean-Georges at the Trump International Hotel & Tower New York.
But while working as a chef, Mr. Senat also spent some time in Philadelphia — his sister and brother lived there. “Philly became kind of like the getaway from New York,” he said. His sister tried to convince him to move. He said she’d tell him, “It’s a lot more affordable, there’s a lot more things to do here, it’s a little more fun, it’s not as crazy as New York.”
Mr. Senat tried out at Buddakan, a game-shifting restaurant from the Philadelphia restaurateur Stephen Starr. During his tryout, Mr. Senat spent two days in Old City, where restaurants and retail mix on colonial-era cobblestone alleyways. “I just fell in love with it,” Mr. Senat said. “It didn’t take much for Stephen Starr to convince me to stay in Philadelphia.”
Mr. Senat and his wife got an apartment right there in Old City. “We are definitely New Yorkers at heart; we like the busyness, and we like the bustle,” he said. “Once we got to Philadelphia it was like, ‘O.K., not all major cities are as crazy as New York, and they don’t have to be in order to be great.’”
Mr. Senat said his friends in New York have inquired about Philadelphia, because they realize it’s just “easier to do things” in a city with about a million fewer people than Brooklyn. He relishes walking into a restaurant in the nicest part of town at 11:15 on a Sunday morning and immediately sitting down for brunch without a reservation. “It wasn’t like a big, you know, ‘Let’s plan this for six hours and let’s do it for two hours,’ which I think kind of happens in New York,” he said. “You have to be very specific about what you want to do and where you want to go, or else: ‘O.K., now we’re wandering around New York City.’”
Immigrant or hipster, there’s a chief reason for choosing Philadelphia over New York: Cost of living. The American dream feels more attainable in Philadelphia at the moment. Asked about the flight of immigrant New Yorkers who are being priced out of the city, Seth Stein, a spokesman for New York City’s Office of Immigrant Affairs, acknowledged the “challenges of income inequality and the affordability crisis that many New Yorkers face.” But Mr. Stein said that New York is still “the ultimate city of immigrants,” with health care and legal services offered to those newcomers.
Reasonable rents aside, Philadelphia is not an immigrant utopia. A ProPublica/Philadelphia Inquirer investigation recently concluded that the Immigration and Customs Enforcement office based in Philadelphia is one of the most aggressive in the country, with high numbers of arrests of immigrants without criminal records. Peter Gonzales, who runs the Welcoming Center for New Pennsylvanians, a nonprofit that assists new immigrants in Philadelphia, said Mayor Jim Kenney’s pushback against ICE has helped neutralize the deportation threat. Mr. Kenney sued Attorney General Jeff Sessions over the Trump administration’s efforts to withhold federal grants to sanctuary cities. In early June, Philadelphia prevailed, and Mr. Kenney did what can only be described as a happy dance on Twitter.
Immigrants are taking note, Mr. Gonzales said, getting a message from both their local politicians and their neighbors that they’re welcome regardless of ICE’s actions. “The tension is causing a lot of trauma and distress that people are experiencing, but it’s also bringing people together to fight back,” Mr. Gonzales said.
One of the activists fighting back is Prudence Powell. She was an undocumented 12-year-old when she moved from Jamaica, in the Caribbean, to Jamaica, in Queens. At 17, pregnant with her son, she dropped out of high school. Ms. Powell struggled with poverty as she took off-the-books, part-time jobs in New York. At 21, she moved to Philadelphia and found her footing. She became a Dreamer through the DACA program for undocumented young people, earned her G.E.D. at Temple University and began volunteering at the Pennsylvania Immigration and Citizenship Coalition nonprofit. She now works there full time.
“Being in Philly has really opened up doors, sharing my story has opened up so many doors, DACA has opened up so many doors,” she said. And so has the affordability of life outside of New York. “New York is the first place you go, and then you branch out to Philly or Allentown or York or Baltimore,” Ms. Powell said. “New York is always the first stop.”
About 27,000 people move from New York to Philadelphia each year, according to the census, amounting to one of the largest migration flows between metro areas. A separate Baruch College study came up with a smaller overall figure but still concluded that more New Yorkers are moving to Philadelphia than the other way around.
Part of New York’s function, the study said, is to “receive large flows of foreign migrants and to redistribute people across the nation.” Those redistributed to Philadelphia will find a town on a winning streak. The population of the city is growing for the first time in decades, buoyed by both immigrants and millennials in Center City drawn by the luxury of living, working and drinking within the same few blocks. The skyline is rapidly expanding on both sides of the Schuylkill, punctuated by the nearly complete Comcast tower, the tallest building in the city.
The biggest good news for Philadelphians, though, is that the Philadelphia Eagles are finally Super Bowl champions. Public schools closed for the victory parade in February. That’s when Jason Kelce, the team’s center, donned a bedazzled lime green costume lent to him by a Mummers brigade, a Philadelphia-specific kind of performance group made up mostly of blue-collar men. He hollered at the thousands of assembled fans about how a team of underdogs defied expectations by going for it with a trick play on 4th and 1 to win the championship.
“You know who the biggest underdog is?” he asked. He was speaking just feet from the statue of Rocky Balboa, one of fiction’s great underdogs. This is a town that lost both the capital of the United States and the home of the United Nations to New York, so there’s a bit of a chip on the civic shoulder. “It’s y’all, Philadelphia!” He then led the faithful in a profane chant that ended with, “Philly, no one likes us, we don’t care!”
The thing is, people do like Philadelphia. Immigrants like Philadelphia. New Yorkers, apparently, even like Philadelphia. But Philadelphia nonetheless feels forever slighted by her northern neighbor.
Down the list of transgressions, but not that far down, is the bitter memory of an article that ran 13 years ago in this newspaper’s Style section claiming Philadelphians occasionally refer to their city as the “sixth borough.” The writer, Jessica Pressler, lived in Philadelphia at the time but, according to the bio on her own website, “was virtually run out of town, and was fortunately granted asylum by New York.” She was excoriated for insinuating that Philadelphia was some appendage of New York.
Looking back on it now, Ms. Pressler said that the piece “tapped into this resentment” that Philadelphia has toward its “big brother that lives really close and is cooler and gets all the attention.” But that perception may now be outdated, and for one major reason. “New York has gotten in that time so prohibitively more expensive,” she said.
“People don’t see leaving New York as a failure anymore like they used to. Now it’s like, ‘That’s a smart thing to do, why would you suffer here?’” Ms. Pressler said. “You’re going to be able to walk to work and have a grocery store and have a patch of grass — that’s really cool.”
She herself now lives in Queens but said that two neighbors, both of immigrant backgrounds, recently told her they were moving to Philadelphia. “That sounds like a good idea,” she told them. “That sounds really nice.”
Every Friday afternoon at 5:30 pm the doors of “the El”—one of America’s oldest elevated subways—swoosh open at Girard and Berks Street stations, unleashing a stampede of Millennials, yuppies, hipsters, entrepreneurs, and empty nesters onto Front Street.
As fast as the doors close, they scatter east down a maze of narrow streets swirling with trash, bumping shoulders with the occasional heroin addict and scrappers pushing shopping carts piled high with salvaged sheet metal. Nobody blinks.
A half dozen blocks away from their newly-built, half-million dollar townhomes, the lines twist out the doors at Pizzeria Beddia and Frankford Hall, two of Philadelphia’s hottest foodie spots. Across the street, Johnny Brenda’s is already packed—hosting as they have for over a decade one of America’s hottest indie rock bands. Mothers pushing strollers window shop past Lululemon along Frankford Avenue’s buzzing retail corridor fronted with wine bars, coffee shops, couture boutiques, yoga studios, a vintage motorcycle joint, and an Argentinian tango dance school.
Visually the dichotomies are jarring. Culturally the contradictions are even more confusing. Yet when the El disgorges its “New Fish” every afternoon it epitomizes the driving forces behind Fishtown’s warp-speed transformation, and the demographics fueling America’s new urban revolution.
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The El links Fishtown with downtown Philadelphia in less than nine minutes. When it was built in the early 20th century the El was the city’s transportation crown jewel, threading together a booming corridor of working class neighborhoods made up of mostly Irish Catholic and Eastern European immigrants. As many of them de-populated with suburbanization in the 70s and 80s, the El fell on harder times. The cars smelled like piss and cheesesteaks on the weekends. Underneath the tracks, Front Street and Kensington Avenue became two of Philadelphia’s most crime-infested drug corridors.
Today, the El is held up by local politicians, developers, and the media as the foundation of Philadelphia’s new model for Transit Oriented Development. It’s also magnetizing a new generation of Millennials, Baby Boomers, and young professionals who are summarily rejecting suburbia, car culture, and food deserts in favor of independently-owned retailers, farm-to-table restaurants, and the new self-supporting micro-economy to move back downtown again.
Everything about Fishtown’s resurgence makes sense when you look at it on Google Earth.
It’s wedged into Philadelphia just north of downtown like an anvil at the first sharp right turn in the Delaware River. The El hems in its western border. To the east, I-95 connects Fishtown to New Jersey, New York, Baltimore, and Washington D.C. in less than two hours. Trolley and bus routes fan out in every direction from there through a checkerboard of community gardens, dog parks, and green space.
When you zoom in closer, the blocks harden into tidy grids of brick and brownstone row homes. Density on this scale a few decades ago fueled Philadelphia’s urban flight. Today, Fishtown’s mass and disconnected connectedness are the envy of every American neighborhood trying to reinvent itself. So are the real estate stats.
Home values here have nearly tripled since the Great Recession. Most single-family houses have an accepted offer in less than four weeks. Many sell in bidding wars. The current sale to list ratio is a scorching 98.8%, going toe to toe with Williamsburg (Brooklyn) and Washington, D.C. Two decades ago Fishtown was a dirty Philadelphia real estate word. Now every realtor in the city is trying to bolt another neighborhood onto it.
The national accolades are even more eye-popping. In 2015 Bon Appetit ranked Pizzeria Beddia America’s best pie. Philly Style Bagels’ Classic Lox Sandwich took home the magazine’s prize for the country’s best sandwich the following year. Last summer Jay-Z tapped local bake shop Cake Life to make Beyonce’s birthday cake. Zagat just anointed Lebanese-themed SurayaPhiladelphia’s hottest new restaurant opening. Most recently, Wm. Mulherin’s Sons was crowned America’s best new hotel.
Think about that for a second: a four-room, retro-chic neighborhood hotel reclaimed from an old whiskey distilling factory barely a year ago—fifteen-feet from the rumbling El—just beat out the newest launches from Waldorf Astoria and Ritz Carlton on the beach.
Not surprisingly, the outside money into Fishtown has started pouring in. Small-scale flippers are all of a sudden getting squeezed out by New York City developers snatching up every warehouse left for sale. Demand shows no sign of slowing down. At the rate things are going there won’t be an empty lot left by 2020.
The new normal is making some locals nervous. Newcomers don’t want the secret getting out. Older residents fear the parking wars to come as rumors swirl that 19125 is about to be annexed as New York City’s “6th Borough”. Other long-time residents who’ve owned their parents’ houses mortgage-free for decades, however, are laughing all the way to the bank.
Part of Fishtown’s boomerang is simple supply and demand.
As Philadelphia’s downtown rents have climbed steadily for decades, entrepreneurs, start-ups, and artists have been increasingly forced out of center city. The first wave moved into Northern Liberties fifteen years ago, Fishtown’s southern neighbor. Forward-thinking investors always knew that Fishtown was next.
The other part of Fishtown’s explosion, however, is something that’s harder to put your finger on. There are a dozen other neighborhoods closer to downtown Philadelphia with an established historic housing stock and vacant lots that still can’t quite get it together.
Fishtown’s boom raises complicated questions about how urban revitalization works in some places and not others. Why Fishtown? Why now? And more importantly how did a historically working-class neighborhood shoved up against an industrially developed river become the new American model for making a neighborhood thrive again?
Fishtown didn’t always look like this.
When Rick Miller moved to Fishtown’s fringe twelve years ago just off Front Street, his second purchase after his house was a pit bull. His neighbors on either side were entrenched dealers who catered to a steady stream of heroin addicts.
“This place was rough,” Miller, a home building executive, tells me. “But it was the only neighborhood where my wife and I could find a house in Philadelphia with a yard, three bedrooms, and street parking for under $200,000. There were hookers and drunks outside our door almost every morning. But the neighborhood was also full of families who’d been here for years. It was stable and sketchy all at the same time.” Today Miller’s neighbors across the street are Ph.D. students and stock analysts who live in newly built townhomes with designer kitchens and roof deck views of Philadelphia’s skyline.
Fishtown’s core never got as dicey, even in the late 70s and 80s when the factories started shutting down. There were the occasional addicts and pimps. Gangs from neighboring Kensington or Port Richmond sometimes tried to elbow in. But “Old Fish” always held the borders and self-policed. Bad seeds didn’t last. Problems got solved. Often with a pipe.
Fishtown’s fists-up, survivalist identity has been genetic for more than two centuries. It boomed and busted a few times, mostly in step with the larger economy. But it was never not a neighborhood, nor fell into irrecoverable, architectural disrepair. It was always a place where parents raised families on blocks where everyone knew each other, whose kids played together in the streets, who in turn married other Fish and raised new families a few houses away.
For outsiders, some of the pipe-and-heroin stereotypes persist. But Fishtown’s essential identity as a safe, cohesive, creative, working neighborhood isn’t something that planners or politicians can conjure into being out of thin air. Not surprisingly, its resurgence doesn’t surprise any of the locals who’ve lived here the longest.
Cass Sparks was born in Fishtown in 1934. Her grandfather immigrated here from Ireland in 1890 and joined the Navy. Her father was a cop who worked the beat. Today, she’s the matriarch of four generations of Old Fish most of whom still live within a few blocks of one another.
Sparks’ memories growing up here are typical of those who were raised in blue-collar East Coast neighborhoods during the Great Depression and WWII. Men worked the factories and docks. Women raised the children. Neighborhoods stuck together like clans. At the time, Fishtown was an American industrial powerhouse, including Stetson Hats, the Slinky, and Penn Reels. Sparks’ friends and neighbors were the immigrants who defined the early 20th century American Dream and kept it humming in the trenches.
“People didn’t leave Fishtown because they couldn’t afford to,” Sparks recalls. “But if you wanted a new job, you could just quit and walk next door and find a better one. We looked after each other. We kept things clean. We kept the neighborhood safe. We took pride in what we had and what we made. There was always something special about this place, and everyone knew it. That’s never changed.”
When Sparks moved out of her parents’ home in 1957, she bought her first house with her husband for $12,000. When I ask her about the new half-million dollar townhomes going up across the street, Sparks responds simply that America’s greatest resilience is adaptation.
“The improvements here have always been brought about by the people who live in the neighborhood. It’s always happened house by house, block by block for generations. The new people who are moving in now are doing the same thing all over again,” she says. “They’re the new immigrants. Change is inevitable.”
In this way, Fishtown’s story isn’t about a Renaissance or reinvention. It never needed a makeover in the first place. Fishtown’s story is about a distinctly American kind of demographic change—and how neighborhoods organically and purposefully evolve to retain the best of themselves, yet at the same time become more diverse, prosperous, and economically sustainable over time. For other cities seeking to re-imagine their own historic downtowns, it’s also a political playbook on how to leverage a community’s existing, working fabric without tearing the old-school threads apart.
No matter who you talk to Paul Kimport and William Reed are roundly credited with making the first move that put Fishtown back on the map.
In 2003 the duo who already opened Northern Liberties’ Standard Tapdecided to buy an old boxer’s bar at the corner of Frankford and Girard Avenues. At the time Johnny Brenda’s was a legendary local dive in the best sense of the word. It started serving shots to the nightshift crew at 7:00 am. By mid-afternoon the neighborhood kids hustled outside for six-packs and smokes. After work it catered to the Bud and broken pool stick crowd. Brawls frequently spilled into the street.
But in “JBs”—and in Fishtown—Kimpton and Reed saw an opening to do something transformative. Like they had in Northern Liberties, they saw a neighborhood that was changing, and a new demographic looking for more than Schlitz and sucker-punches. The location was perfect. So was the building.
“The biggest challenge for us when we first bought the bar was figuring out how we could get locals and newcomers to come together without beating each other up,” Kimport recalls, “Fishtown was always a tight, local neighborhood. But in the early 2000s there were also a lot of new people moving in here. We ultimately realized that everyone basically wanted the same thing. And if we could create that, this place would be a success.”
That “same thing” turned out to be much more than just another corner bar. After re-vamping JB’s interior, which included running underground piping to put dozens of local micro-brews and wines on tap, and gentrifying the menu guided by an executive chef (that would be Kimport), Kimport and Reed bought the two buildings behind them in 2006, busted through the walls, and turned Johnny Brenda’s 2nd floor into arguably America’s hottest small-scale indie rock venue.
JBs’ music quickly became a magnet. Within a few years, the road to success for every up-and-coming indie band and DJ in America at some point ran through JBs’ sound booth. JBs’ notoriety also attracted the attention of developers throughout Philadelphia and beyond, who quickly saw what Kimport and Reed had already learned: Fishtown’s geography was inevitable, the neighborhood was bullet proof, and the potential was huge.
“We didn’t really know what we were doing in Fishtown or what our goal for JBs was when we bought the place,” says Kimport. “But we always knew that the fundamentals here were perfect. Fishtown just needed time to be rediscovered.”
It’s impossible to pinpoint the exact moment when any neighborhood turns. Gentrification and de-population often grind away imperceptibly like glaciers. Kimport and Reed never set out to transform Fishtown on a grand scale. It was a young, up-and-coming developer named Roland Kassis who did.
Kassis clocks in at 5’7”, a buck forty, mildly pugilistic, and kinetically relentless. When you roll around town with him in his Range Rover there’s no one he doesn’t know. In the same sentence he can be both charming and brawlish. Which is precisely why Fishtown let him in.
Kassis grew up in the 1980s splitting his time between Lebanon and Liberia, swapping one civil war for another. At 16, he immigrated to a small city just north of Philadelphia where he lived with an aunt and uncle who he barely knew. Last year, Philadelphia Magazine ranked him one of the city’s 100 most influential people and the “Developer To Emulate”.
Kassis put his first roots down in Fishtown in 2006 in the fast and furious days before the Great Recession. Downtown Philadelphia was booming. Word about Johnny Brenda’s was spreading. In Fishtown, however, most of Frankford Avenue and Front Street still looked like a post-industrial badland. As a developer at the time, Kassis was green. But his long-term optics on real estate were always framed through a wider lens. Kassis intuitively foresaw buildings as living things that could transform neighborhoods through human experience. Profit would follow if you did it right.
Kassis acquired his first Frankford Avenue property in 2006—a mash-up of three old industrial storefronts. Early the next year, he bought an abandoned brewery across the street without a roof that looked “like a bombed out building in Beruit”.
“I was new to the commercial real estate world back then,” Kassis tells me. “But real estate was booming everywhere in Philadelphia. So I started buying up everything I could in areas that I had a good feeling about. I always had a good feeling about Fishtown.”
Kassis’s monopoly game came to a screeching halt in fall 2007 when the Recession hit. Unexpectedly, it gave him a timeout to pause, sort through his principles for adaptive re-use, and think about what a vibrant vision for Fishtown might actually look like.
“I remembered growing up in Europe that cities are like villages, just on a larger scale,” Kassis recalls. “Neighborhoods don’t grow in a vacuum. Villages become sustainable when there’s a commercial core at their heart. Everything grows outwards from there. Fishtown was an urban village waiting to happen.”
When the Recession started to thaw, Kassis doubled down. He borrowed hard money, quietly snatched up dozens of vacant warehouses and empty lots along Frankford and Front, and consolidated the ones he already owned. He started knocking down the walls, dropping in skylights, and reclaiming the 100-year old trusses and beams from one warehouse to renovate another. Before anyone knew it, Kassis owned over half of main street Fishtown for more than eight blocks north and south of Johnny Brenda’s.
At the same time, Kassis the salesman took the hard sell to every up-and-coming business and entrepreneur in Philadelphia who would listen: Fishtown is about to go big.
Kassis’s tipping point happened in 2010 when he pitched restaurant-whisperer Stephen Starr on re-imagining his bombed out Beruit-style hole on Frankford into an open-air, German-themed beer garden. Kassis repointed the brick walls, sent his architect to Bavaria, and sought out the finest German micro-brews and bratwurst in town. After finally seeing Fishtown’s potential and Kassis’s concept for himself, Starr got on board. They opened Frankford Hall together in 2011. It’s now Philadelphia’s most iconic foodie-brew destination in the city that helped to put the American ‘biergarten’ experience on the map.
Frankford Avenue’s floodgates opened shortly after that. Fette Sau, another award-winning Starr-Kassis collaboration inspired by whiskey and boutique, barbarian-style BBQ, filled in the adjacent property in 2013. Mid-century themed Root launched next door in 2015, followed by Cheu Fishtown, offal-heaven Kensington Quarters, Fishtown Social, and Cake Life up the street, which was started by Lily Fischer and Nima Etemodi who were Finalists on Food Network’s Cupcake Wars.
Wm. Mulherin’s Sons opened its rustic-chic Italian bar and restaurant on Front Street a year later in fall 2016, shattering every record for what Fishtown could charge for a plate of anything while packing tables every night. More than two dozen award-winning-in-any-other-neighborhood joints now fill in every block in between Front and Girard—including the likes of Martha , KraftWork, Sketch Burger, Soup Kitchen, Evil Genius Brewery, Loco Pez, and the Balboa Supper Club. To call Fishtown Philadelphia’s most energetic and innovative foodie neighborhood might piss some other hoods off. But it wouldn’t be an overstatement.
Food always played an outsized role in Fishtown’s resurgence.
More recently, a thriving new entertainment and entrepreneurial ecosystem has backfilled in behind the cuisine. Sugarhouse Casino launched first in 2010, staking out a highly visible corner at the base of Frankford Avenue on the Delaware River. The Fillmore Philadelphia and comedy club Punch Line Philly opened up their doors up the street a few years later. Post-apocalyptic restaurant Mad Rex went live late last year, filling in one of the last wedges left at Fishtown’s southern apex. Sugarhouse just completed a major renovation last year including a new entertainment venue and steak house. Two new museum openings are planned for 2019 just up the street.
Urban economists like to call this kind of interconnected, organic growth the new ‘micro-economy’. What it means practically is that Frankford Avenue’s dozen blocks extending up from the Sugarhouse now comprises one of the lowest turnover urban corridors in America, including headquartering national firms like La Colombe, HoneyGrow, Blue Cadet, and O3. Further downstream it’s also incubating dozens of other small-scale start-ups and retailers—like craft distilleries, brewers, organic markets, apparel and graphic designers—who are in turn attracting new talent, fresh ideas, and investing back into the neighborhood’s creative, intellectual drive train.
Painting Fishtown as an urban panacea would be misleading, however. Some streets look like the trash hasn’t been picked up in weeks. There are still growing pains to come. But trash isn’t an intractable problem. Fear of change, enmity towards newcomers, and resentment about revitalization are.
Fishtown has largely avoided these pitfalls—mostly because the people who first invested in its re-development knew they didn’t have a choice. When Kimport, Kassis, and Randy Cook of Wm. Mulherin’s Sons wanted variances for outdoor seating, late night hours, and hotel rooms, community groups like the New Kensington Community Development Corporation and the Fishtown Neighbors Association convinced them to knock on doors and ask for input. They held public meetings. In the process, they earned the neighborhood’s trust. Fishtown’s new commercial biodiversity means that the neighborhood is more inherently resistant to long-term environmental shocks regardless of how the demographics keep changing. Everyone here now seems to agree that’s a good thing.
In this way, what’s instructive about Fishtown’s resurgence isn’t just what it did. It’s what it didn’t do. Large-scale developments and by-right zoning changes pushed by outside real estate speculators have been universally shot down. National retailers have been hosed out. The democracy of re-development has often been raucous, table-banging, and sometimes physical. But no one person’s vision about what was right for the neighborhood ever unilaterally prevailed. Which is exactly how everyone involved and invested here always expected it to play out. Because that’s what always made the neighborhood work in the first place.
As for Fishtown’s future, the bull market shows no sign of deceleration. Single-family housing is tightening. Prices are surging. Newcomers looking for a last piece of the early action are quickly realizing that Fishtown’s window is closing.
Commercially the pace is moving even faster. Randy Cook is opening his second restaurant next door to Wm. Mulherin’s Sons next month. A few blocks away Kassis is about to break ground on a boutique, 135-room art-inspired hotel gutted from an old brewery building with a glass infinity pool cantilevered off the roof next to Frankford Hall in partnership with NYC architect Morris Adjmi and entrepreneur Avi Brosh, who’s been pioneering the luxury extended-stay hotel model on the West Coast for years.
Fishtown’s political winds are shifting as well. Last year Kassis convinced Philadelphia and Pennsylvania state officials to consider designating parts of Fishtown a Keystone Opportunity Zone, which would stimulate further commercial development and local entrepreneurship by providing business incentives and tax relief. Fishtown Co, a collaboration of local businesses and entrepreneurs, just launched last month to promote Fishtown’s cultural resurgence to the rest of Philadelphia and the world. The NKCDC and FNA are more engaged than ever.
If there’s a single visual symbol of Fishtown’s comeback, it’s under the rumbling El. All along Front Street between the Girard and Berks Street stations, the pimps and dealers are gone—replaced by velvet ropes and valet parking on the weekends and a real estate frenzy every day in between. New mixed-use residential/retail developments are filling in empty lots that were abandoned as recently as six months ago. Uber surge pricing is standard. Local markets now stock gluten-free pasta and cruelty-free honey.
Onion Flats, a long-time sustainable developer which previously made its name in Northern Liberties, is leading the charge north up Front breaking ground this month a 28-unit apartment building designed to Passive House net-zero energy standards across the street from Berks Street El station. Right next door the design-development firm is simultaneously renovating two historic bank buildings that are arguably the most architecturally significant landmarks left in the neighborhood. One of them has high-end steakhouse written all over it.
“Fishtown always had the ingredients of a great neighborhood,” says Wm. Mulherin’s Sons’ Cook. “It just needed some people to take a risk on it again. Look at what’s happened here in just a few years. Look at the names who are involved here now. This place used to feel like the edge of the world. It used to be under the radar. Now it feels like the center of Philadelphia.”
Note to Fishtown: The secret is officially out.
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Philly won’t slow down in 2018.
“We are very bullish on Philadelphia,” said Jerry Sweeney, CEO of Brandywine Realty Trust, at the Urban Land Institute’s Real Estate Forecast last week.
Sweeney was one of a few top developers and experts who spoke to some of the trends to watch in 2018 here in Philadelphia, from a new kind of workplace to a new kind of renter.
Here are five of the top real estate trends to keep an eye out for come 2018.
1. More apartment concessions to sweeten the deal
Philly is expected to see a lot of new construction deliver in 2018, with multifamily residential builds making up a good portion of it. So as all of those apartments come online, expect to see a lot of these buildings offering concessions—think one month’s free rent—to entice renters to fill up their vacancies, says Gilchrist.
The luxury rental market is most likely to push this, since, simply put, they’re just too expensive for the average Philly renter to afford. This high-end market averages about $3 per square foot—not many people can afford paying $3,000 a month for a 1,000-square-foot apartment.
As Gilchrist points out, when there are hundreds of older Philly rowhomes available for rent at a much lower price point, luxury apartments are going to have to really woo renters with deals to convince them to live in their building.
2. The tale of two renters: Millennials and baby boomers
Talk of millennials in Philly isn’t going to go away anytime soon. As long this group keeps moving into Philly in droves (and puts down more permanent roots here), apartments will still keep coming online.
But there’s another type of renter that developers have started to cater to: baby boomers. There’s been a lot of talk of empty nesters downsizing from their suburban mansions and moving into condos and homes in Center City. But research shows that a lot of adults in this age group are actually transitioning from buyers to renters at a faster rate than millennials.
Bradley J. Korman, co-CEO of Korman Communities, says this means that developers now have to market their communities in two very different ways to attract these different types of renters.
3. A boom in coworking and shared work spaces
At last count, coworking spaces like WeWork, Benjamin’s Desk, and the Yard made up 527,000 square feet of total office space in the Central Business District (CBD). While that’s a small percentage of the city’s total office space, the numbers show this type of workspace could account for as much as 30 percent of office space in the country years down the road. “Coworking will be a huge driver,” said Lauren Gilchrist, vice president of research at JLL Philadelphia.
Philly is already home to a plethora of coworking spaces, and there are a bunch more in the pipeline, including Bond Collective at Suburban Station and Spaces in the old Hale Building. Both are set to deliver next year.
Why are these type of offices so attractive? The flexibility these spaces allow is a big factor, but they also come with amenities like outdoor space, kitchens, and host special events. Gilchrist says to “expect vanilla, un-amenitized Class A trophy office space to struggle.”
4. A different kind of shopping experience
Whoever predicted the end of malls was wrong: They’re not dead, just different. While e-commerce has no doubt caused a major shift in the typical shopping experience, brick and mortar shopping is still the most popular way for folks to consume, and it doesn’t look like people are going to stop shopping in malls anytime soon.
What will change is what malls offer, says Gilchrist. Her research shows that food and beverage is the most popular renovation strategy for malls, making up an astonishing 40 percent, followed by tenant upgrades, entertainment, and multifamily residential features.
PREIT’s redevelopment of the Gallery Mall is a prime example of what Philly should expect with the new shopping experience. After originally promoting itself as the Fashion Outlets, months later it reemerged as the Fashion District of Philadelphia, with an eye toward restaurants and entertainment. Along with flagship stores like H&M, the Fashion District will offer things like Market Eats, a food hall of sorts, as well as a fancy movie theater with reclining chairs with the option to order food and drinks.
PREIT is banking on its redevelopment being one of the most successful mall redevelopments. “We see it as a project that’ll be the premiere urban retail centers in the country,” said CEO Joseph F. Coradino.
5. Philly will have some stiff nearby competition
The desire to live and build in Center City and Philadelphia in general isn’t going to become any less popular next year. But Gilchrist says that by the looks of it, the ‘burbs are making a comeback, too.
“Expect mixed-use suburban office, multifamily, and retail to peak up steam,” Gilchrist said in her presentation.
There are some suburbs in particular to keep an eye on, starting with King of Prussia. The town has seen $1 billion in development in recent years, including a revamp of the famous King of Prussia Mall and the nearby KOP Town Center that is now home to tons of retail, townhomes, and apartment developments. And although it’s many years down the road, the goal to extend the SEPTA Regional line here has gained recent traction.
On the Main Line in Bala Cynwyd, a developer has undertaken a $100 million master plan to redevelop the town’s historic corridor with new retail, restaurants, and apartments.
And while Camden isn’t a suburb, it is much smaller compared to Philly, but also its closest competition. Liberty Property Trust is responsible for all of the waterfront development that’s happening in Camden on the Delaware River, where there is 1 million square feet of mixed-use development under construction.
“That town finally has momentum that’s gaining traction,” said CEO and president William Hankowsky. “I would watch Camden.”
The big real estate investing question this year is not whether to invest in real estate, but where to invest in real estate.
There has never been a better time to buy a real estate investment. But with all the hottest markets in the current housing market being paraded in front of you, which one should you choose?
The Philadelphia real estate market 2018 would be a smart choice and a safe choice for real estate investing this year.
The truth is, while those hot real estate markets can have some of the best real estate investments, they are also usually the most expensive real estate investments. Add in the competition from real estate investors and homebuyers alike, beginner real estate investors will have trouble breaking into such housing markets.
When it comes to the Philadelphia real estate market 2018, it’s a somewhat different story. Let us tell you the real estate investing story of Philadelphia.
Philadelphia Real Estate Market 2018: The BackStory
You probably haven’t heard much about the Philadelphia real estate market 2018, its economy or much else for that matter. But, believe it or not, that can be a good thing for a real estate investor. It’s simply because it can be a sign of stability, one of the best things for successful real estate investing.
No one’s saying the economy of Philadelphia is soaring nor are they saying it’s something Philadelphia real estate investors should worry about. Instead, know that when you invest in Philadelphia real estate, you’ll be surrounded by an economy that is growing, slowly but steadily. This makes for a low-risk Philadelphia real estate investment with the potential to greatly appreciate as the surrounding location experiences growth.
Philly’s Job Market
Addition of jobs is, of course, a major factor in the growth as well as the key to the rising demand for Philadelphia investment property. In 2017, the rate of job growth in Philadelphia was actually faster than that of the national rate.
Even with a fast-growing job market, a Philadelphia real estate investor might be wary of the high unemployment rate of 6.2%. Although much higher than the national unemployment rate, it is declining more than anywhere else in the country. This means things are improving in the Philadelphia real estate market 2018.
As real estate investors know, a location with obvious signs of improvement and growth make for the best places to invest in real estate. This is due to the fact that Philadelphia real estate prices are affordable compared to everywhere else in the current housing market and are likely to see some real estate appreciation as the city improves more and more.
Because of this growing job market, the Philadelphia real estate market 2018 enjoys steady population growth. Just another box to tick in the checklist for the best place to invest in real estate. This population growth furthers the positive trends of the economy, mostly because of the large influx of residents that are more educated and wealthier.
Why the BackStory Matters
Keep in mind that while the backstory doesn’t paint an ideal picture and the Philadelphia real estate market 2018 can’t boast all kinds of titles and rankings, it’s heading in the right path. This means great things for a Philadelphia real estate investor who buys investment property right now. The future of the Philadelphia real estate market 2018 and beyond is a bright one for sure.
Philadelphia Real Estate Prices: The Plot Thickens
Let’s continue our real estate investing story with Philadelphia real estate market trends. These are significant, of course, to know before you decide to invest in Philadelphia real estate.
Philadelphia Real Estate Market 2018: The Stats
Median Property Price: $243,672
Traditional Rental Income: $1,310
Traditional Cash on Cash Return: 2.59%
Traditional Cap Rate: 2.59%
Philly’s Real Estate Prices
This is where the plot thickens in the Philadelphia real estate market 2018. A report from Philly.com earlier this year for the reassessment of Philadelphia real estate prices reported a jump of 10.5% in the median property price. Every Philadelphia real estate investor was stunned, as this reassessment comes along with property tax hikes. With the 10.5% increase, it’s likely taxes would increase somewhere between $500 and $1,712.
While these facts might deter you from investing in Philadelphia real estate, local authorities are doing their best to deal with the situation. A bill came soon after that proposes that the City Council should be able to control Philadelphia real estate assessments in the future, preventing unnecessary tax hikes. In other words, the City Council is doing its best to remedy the situation for Philadelphia real estate investors and residents alike.
Despite the fear of higher taxes on investment property, real estate appreciation can be a good thing. If you buy now, Zillow predicts that Philadelphia real estate will go up 5.1% as the year continues. Luckily, this is the kind of real estate appreciation that makes it relatively possible to enter the Philadelphia real estate market 2018 and eventually sell an investment property for a good return on investment.
Philly’s Housing Inventory
The housing inventory in the Philadelphia real estate market 2018 is currently tight. This would explain the Philadelphia real estate market trends with the rising prices. But for 2018, a lot of new real estate development is in the works, especially for multi family homes. Single family homes, on the other hand, will continue to give Philadelphia real estate investors fewer options due to tight inventory, even with new construction plans.
Airbnb Philadelphia: The Subplot
The Philadelphia real estate market 2018 is Airbnb-friendly. Airbnb is legal in Philadelphia while other major cities continue to battle Airbnb or enforce strict regulations on these investment properties. Airbnb Philadelphia welcomes real estate investors with open arms.
Airbnb Philadelphia: The Stats
Airbnb Philadelphia Rental Income: $920
Airbnb Philadelphia Cash on Cash Return: 1%
Airbnb Philadelphia Cap Rate: 1%
With an Airbnb occupancy rate of 67% and general short term rentals having reported record occupancy rates in 2017, Airbnb Philadelphia is a great choice for real estate investors in this housing market.
The Best Neighborhoods in Philadelphia for Real Estate Investing
Interested in investing in Philadelphia real estate? You should be. The Philadelphia real estate market 2018 is only getting better and better with time. Even with Philadelphia real estate prices on the rise, they are relatively affordable compared to other popular real estate markets but still offer a great return on investment.
Of course, this return on investment will only come in the best neighborhoods in Philadelphia. Because some Philadelphia neighborhoods are experiencing drops in real estate prices, high crime rates, and loss of population, a Philadelphia real estate investor really needs to be able to differentiate the best neighborhoods in Philadelphia from the not so great ones. Always be sure to check on such facts before investing in Philadelphia real estate
- Median Property Price: $439,999
- Traditional Rental Income: $1,583
- Traditional Cash on Cash Return: 1.87%
- Traditional Cap Rate: 1.87%
- Airbnb Rental Income: $2,876
- Airbnb Cash on Cash Return: 4.77%
- Airbnb Cap Rate: 4.77%
- Airbnb Occupancy Rate: 57.57%
- Median Property Price: $259,900
- Traditional Rental Income: $1,549
- Traditional Cash on Cash Return: 3.23%
- Traditional Cap Rate: 3.23%
- Airbnb Rental Income: $1,814
- Airbnb Cash on Cash Return: 4.3%
- Airbnb Cap Rate: 4.3%
- Airbnb Occupancy Rate: 43.52%
- Median Property Price: $502,000
- Traditional Rental Income: $1,715
- Traditional Cash on Cash Return: 1.32%
- Traditional Cap Rate: 1.32%
- Airbnb Rental Income: $2,820
- Airbnb Cash on Cash Return: 3.37%
- Airbnb Cap Rate: 3.37%
- Airbnb Occupancy Rate: 51.86%
- Median Property Price: $614,900
- Traditional Rental Income: $1,730
- Traditional Cash on Cash Return: 0.95%
- Traditional Cap Rate: 0.95%
- Airbnb Rental Income: $3,061
- Airbnb Cash on Cash Return: 3.19%
- Airbnb Cap Rate: 3.19%
- Airbnb Occupancy Rate: 50.28%
- Median Property Price: $332,500
- Traditional Rental Income: $1,635
- Traditional Cash on Cash Return: 2.41%
- Traditional Cap Rate: 2.41%
- Airbnb Rental Income: $1,792
- Airbnb Cash on Cash Return: 2.89%
- Airbnb Cap Rate: 2.89%
- Airbnb Occupancy Rate: 44.64%
- Median Property Price: $329,900
- Traditional Rental Income: $1,863
- Traditional Cash on Cash Return: 2.73%
- Traditional Cap Rate: 2.73%
- Airbnb Rental Income: $1,720
- Airbnb Cash on Cash Return: 2.4%
- Airbnb Cap Rate: 2.4%
- Airbnb Occupancy Rate: 43.95%
- Median Property Price: $479,900
- Traditional Rental Income: $1,873
- Traditional Cash on Cash Return: 1.92%
- Traditional Cap Rate: 1.92%
- Airbnb Rental Income: $1,952
- Airbnb Cash on Cash Return: 2.11%
- Airbnb Cap Rate: 2.11%
- Airbnb Occupancy Rate: 45.26%
Philadelphia is perhaps the brightest housing market in the nation, with one report suggesting a price growth of 16.6% (now 13.4% in May). See the national housing report and the housing forecast for 2019.
Prices have risen 11.3% in the last year and an astonishing 31% in the last 2 years according to Zillow. DOM are at record lows. Buyers are eager, but listings are scarce.
You can see how Philadelphia’s prices contrast to other cities and the general forecast for the US.
That’s much higher price growth than in the Bay Area, Los Angeles, Miami, Houston, Seattle, San Diego, New York and Boston.. For investors, Philadelphia might be one of the best cities for capital appreciation by 2020.
2018 has been a phenomenal year with new construction releases so plentiful, and while sales and apartment rentals were buoyed by free concessions, the demand is getting so intense that incentives won’t be needed to fill homes and condos being built.
Home buyers in Philadelphia and real estate investors are wondering whether this is a good time to buy in Philly.
How does this city compare with the best cities to invest in? Prices are expected to rise 13.4%, listings have fallen 1200 during the last month, foreclosures are up, and sales actually rose 18% last month. Sold vs list price was 98% which is much stronger than average in the last 2 years.
|Philadelphia Community||Homes For Sale||Median Sale Price||Price Growth||Price Growth Forecast|
|East Mount Airy||55||$200,000||1.10%||1.60%|
|West Mount Airy||44||$349,900||1.10%||1.60%|
|West Oak Lane||79||$140,000||0.60%||12.20%|
What’s Driving Philadelphia’s Market
Although not enjoying the same employment rate growth of Dallas or Phoenix, job growth in Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area rose 39,700, or 1.4% over the year, according to the U.S. Bureau of Labor Statistics. Demand for homes is steady but availability is the issue as it is in so many cities across the country.
Word is, that the market is driven by Millennials and Babyboomers. It seems millennials are selling their big houses in favor of renting. As rental opportunities appear, we might see more sell their homes.
Since 2015, rents have risen about $150 on average, not the same rate as home prices during the same period.
Article By: Gord Collins