The COVID-19 crisis could create opportunities for the Philadelphia region to thrive as a real estate market going forward, and buttress its reemergence as a center for business, according to an expert at Rittenhouse Appraisals.
PHILADELPHIA, Pa. /Mortgage and Finance News/ — The COVID-19 crisis could create opportunities for the Philadelphia region to thrive as a real estate market going forward, and buttress its reemergence as a center for business, according to an expert at Rittenhouse Appraisals.
The fundamentals that have driven a recent real estate boom, largely remain, said Carlo L. Batts, MAI, principal of the Center City-based firm, which provides market research for institutional and private investors. He said there is a demand for housing and services created by an influx of well-paying jobs in the medical and science fields, and those job sectors tend to remain strong.
Batts cited the West Philadelphia submarket, recently one of the area’s hottest, as likely to power through the economic downturn, driven by demand in the multifamily and commercial sectors. There are tracts West Philadelphia that Batts said appear ripe for activity, such as the pocket between Market Street and Walnut Street that is zoned CMX-4, or mixed use. These tracts could attract high-density, high-rise development, he observed.
“The area is incubating into a primary office submarket and further expansion as a medical submarket and the research parks and medical research and science expansion is going to continue,” Batts said. “Up until the shutdown, you had a consistent movement of new developments, whether it was the Schuylkill Yards development or out at 38th and Market, that were bringing an influx of new jobs.”
Those jobs have largely tended to be medical related or scientific research positions, meaning they offer above average pay. That will fuel a demand for housing and services, which will drive the residential and commercial real estate development, Batts said.
Low interest rates will also impact liquidity, which could mean continued development in the medical research, medical office markets and in the multi-family market. “There is still a housing crisis in Philadelphia and in the region,” Batts said. He suggested that, despite the implications of social distancing to slow the spread of the virus, people still want convenience in their lives. “I think it further solidifies the trend for urban living, but in a more integrated housing structure.”
Batts predicted that some troubled projects won’t be able to survive the disruption. “I think you are going to see some bad projects hit the market or go into foreclosure or banks start taking back more assets,” he said. “You are going to see a lot of people think now is the time to dump assets that weren’t performing anyway, just to get them off the books.”
Batts said his firm will assist clients as they prepare for the post-crisis opportunities. “We service property owners and investors trying to maintain their assets and keep returns coming,” he said. “There are a lot of projects in the works. Some will make sense. Some won’t. We help clients understand the feasibility of those projects, now, and where there are opportunities to make them fit the current conditions.”
About Rittenhouse Appraisals:
Rittenhouse Appraisals is a regional real estate valuation firm located in Center City Philadelphia and operating throughout the Delaware Valley. It has experience and expertise in appraising all forms of commercial real estate: retail, industrial, multi-family, net lease, office, institutional and special use properties. It also works with banks and on troubled assets.
For more information, go to https://rhappraisals.com/ or call: 267-314-8635
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*Photo caption: Carlo L. Batts, MAI, principal.
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