PHILADELPHIA | 3601 Market | 320 FT | 28 FLOORS

[domodeez]

From 3601market.com:

[thisisforreal]

So...$1450 would be the studio price? I'm sorry, but the Science Center part of U. City doesn't have the ambiance to justify that. Tone down the quartz countertops and get a studio in the $900 range. Between the Summit prices and this, either things are about to take off that I wouldn't have seen coming, or the financiers of these projects are about to lose their shirts.

What do you all think?

As someone who owns a tiny plot of land within 15 blocks of here that is rented, my experience is significantly different from what they're constructing.

[summersm343]

Originally Posted by thisisforreal

So...$1450 would be the studio price? I'm sorry, but the Science Center part of U. City doesn't have the ambiance to justify that. Tone down the quartz countertops and get a studio in the $900 range. Between the Summit prices and this, either things are about to take off that I wouldn't have seen coming, or the financiers of these projects are about to lose their shirts.

What do you all think?

As someone who owns a tiny plot of land within 15 blocks of here that is rented, my experience is significantly different from what they're constructing.

I think there is definitely a demographic that will pay $1450 for a studio in a brand new building in this area. Have you ever seen the prices at Domus?

[MusicMan84]

Time will tell.

There is a lot of development in this area, and options are continually improving over the past few years I have worked in the area. Transit friendly location, and if Drexel ends up developing the University City H.S. site in the next few years - this could be a great location, long term...but that would seem a little high for now.

[thisisforreal]

Originally Posted by summersm343

I think there is definitely a demographic that will pay $1450 for a studio in a brand new building in this area. Have you ever seen the prices at Domus?

I have seen the prices at the Domus. The only people I know who live there are empty nesters that downsized from the suburbs when their last child left for college. They love it there (husband and wife both work at CHOP). But the Science Center corridor has more of a 20-30's focus, right? Am I splitting hairs here when I should just concede I'm wrong?

[jn00]

Originally Posted by thisisforreal

I have seen the prices at the Domus. The only people I know who live there are empty nesters that downsized from the suburbs when their last child left for college. They love it there (husband and wife both work at CHOP). But the Science Center corridor has more of a 20-30's focus, right? Am I splitting hairs here when I should just concede I'm wrong?

You're right to be skeptical. On the supply side, you have a new dorm from Penn, the new quasi dorm from Drexel (Summit) the two under construction highrises (3601 Market - 364 units and Chestnut 38 - 280 units), the recently completed Evo which, while timed poorly, has not had a great leaseup, and then numerous other small projects (42nd & Baltimore, Hub 3939, Croydon, etc), several of which are coming on line at the same time. Each building has locational and amenity pros & cons. Long term prospects for UC are extremely strong, but there may be a leasing and rents blip over the next few years.

[Londonee]

Originally Posted by thisisforreal

So...$1450 would be the studio price? I'm sorry, but the Science Center part of U. City doesn't have the ambiance to justify that. Tone down the quartz countertops and get a studio in the $900 range. Between the Summit prices and this, either things are about to take off that I wouldn't have seen coming, or the financiers of these projects are about to lose their shirts.

What do you all think?

As someone who owns a tiny plot of land within 15 blocks of here that is rented, my experience is significantly different from what they're constructing.

I'm with you. I questioned the viability of close to 1000 new apartments on Washington Avenue, arguably the ugliest thoroughfare (next to Spring Garden East of course) in the Greater CC area--with about as much quaint charm as a sledge hammer to the face--and was called crazy by forumers.

Washington Ave can't even hold a candle to this end of Market Street from a connectivity and aesthetics stand point--and yet I still wonder who is renting these? For $1500...you could do a lot better from a location standpoint.

[jsbrook]

Originally Posted by thisisforreal

So...$1450 would be the studio price? I'm sorry, but the Science Center part of U. City doesn't have the ambiance to justify that. Tone down the quartz countertops and get a studio in the $900 range. Between the Summit prices and this, either things are about to take off that I wouldn't have seen coming, or the financiers of these projects are about to lose their shirts.

What do you all think?

As someone who owns a tiny plot of land within 15 blocks of here that is rented, my experience is significantly different from what they're constructing.

Do not agree. I think things are going to take off. 1500 Locust is either at that price for a studio and probably well above that. Certainly the one bedrooms and larger apartments there are relatively costly. My first apartment when I moved back to Philly from New York was in that building. It's a good location and nice amenities, etc.., but in my opinion, no great shakes. I don't see University City as inherently worse. And I think the discount for a 'sub-par' location is already built in. I think they will do fine. But we'll see...

[jsbrook]

Originally Posted by jn00

You're right to be skeptical. On the supply side, you have a new dorm from Penn, the new quasi dorm from Drexel (Summit) the two under construction highrises (3601 Market - 364 units and Chestnut 38 - 280 units), the recently completed Evo which, while timed poorly, has not had a great leaseup, and then numerous other small projects (42nd & Baltimore, Hub 3939, Croydon, etc), several of which are coming on line at the same time. Each building has locational and amenity pros & cons. Long term prospects for UC are extremely strong, but there may be a leasing and rents blip over the next few years.

But what will the units inside 3601 Market look like? Are they nice inside? Do we know yet? Notwithstanding a great external design and nice amenities, Evo sucks - though marketed to graduate students, the units are virtual college dorm rooms. If the 3601 Market apartments are nice, I think they'll do fine and command good prices.

[summersm343]

Originally Posted by jn00

You're right to be skeptical. On the supply side, you have a new dorm from Penn, the new quasi dorm from Drexel (Summit) the two under construction highrises (3601 Market - 364 units and Chestnut 38 - 280 units), the recently completed Evo which, while timed poorly, has not had a great leaseup, and then numerous other small projects (42nd & Baltimore, Hub 3939, Croydon, etc), several of which are coming on line at the same time. Each building has locational and amenity pros & cons. Long term prospects for UC are extremely strong, but there may be a leasing and rents blip over the next few years.

I agree with the others in that these units will do fine at this price range.

jn00, you are combining a bunch of different buildings that will be dropping units on the market at different times.

Evo is already on the market, and is about 50% leased. The reason for this is it missed the boat entirely coming on the market in September, and was not able to lease up to students who by this time already have housing. I expect it to fill up more over next summer. The units in Evo just don't appeal to anyone out of school.

Lancaster Square, 3601 Market, 38 Chestnut & The Hub II will all be coming on the market at the same time. Lancaster Square is a dorm for Drexel undergrads, and while it will be competition, I believe 3601 Market, The Hub II and 38 Chestnut will also appeal to non students and grad students.

New College House Penn Dorm will not be coming on the market until 2016.

The Croydon Development will honestly just not appeal to the same demographic as these luxury highrises. It is too far out.

4224 Baltimore hasn't even broken ground yet, so I don't think it should be in the conversation.

I really don't think there will be an issue absorbing like 1,000 units in University City. There is a growing student population in both Drexel and UPenn and I believe there is now more demand from non students to live in University City as well. It really is becoming and extension of Center City, and has some of the fastest job growth and creation in the entire Philadelphia region.

[summersm343]

Update from Hidden City



http://hiddencityphila.org/2014/12/u...rtment-towers/

[Philly Fan]

Originally Posted by summersm343

New College House Penn Dorm will not be coming on the market until 2016.

* * * *

There is a growing student population in both Drexel and UPenn and I believe there is now more demand from non students to live in University City as well. It really is becoming and extension of Center City, and has some of the fastest job growth and creation in the entire Philadelphia region.

Penn's new college house really shouldn't even be in this mix (and I realize that's not your intent). It won't be just some apartment building in which Penn students can rent. It will be a fully integrated part of Penn's college house system, which includes academic and extracurricular residential programs and events, and resident house deans, faculty masters, etc. It's intended to be an essential component of the entire Penn undergraduate academic experience, similar to the residential colleges and college houses at schools like Yale, Princeton, etc.

And regarding Penn's student population, it is most certainly NOT growing, and especially at the undergraduate level. In fact, Penn's undergraduate and graduate schools have had the same numbers of students for several decades now, and there are no plans to increase those numbers. The applicant pools continue to increase in size, but not the number of applicants getting in. That's how Penn has shrunk it's undergraduate acceptance rate from over 20% to under 10% in less than a decade, a significant metric among the Ivy League and other highly selective colleges and universities.

[thisisforreal]

$1450. Let's say a studio apartment is a generous 600 sq ft. That's $29/sq ft annual rent. That's comparable to commercial Class A space at the Navy Yard, and more expensive than median vacancies for commercial space in Center City.

If it works, I'm all for it, as the value of my home will likely rise. There is some arbitrage right now as those prices haven't move west quite yet. My neighbor is listing this house, for sale, at $153/sq ft:

It's within a mile. Granted, that's beyond the 1/4 mile typical preferred walking distance, so it is a different neighborhood. But it's just 1 stop on the blue line away. There's got to be some spillover as people realize for the same rent as a studio, you can buy (and gain equity) in a 5 bedroom on a nice block.

I'm hoping for about a $150,000 price difference on my block by the time FMC opens.

[summersm343]

Alright we're getting a little off topic here. This is about the development of 3601 Market, not a debate on renting versus buying and what you can get in the surrounding area for the price of a highrise unit.

[Baconboy007]

Originally Posted by Philly Fan

That's how Penn has shrunk it's undergraduate acceptance rate from over 20% to under 10% in less than a decade, a significant metric among the Ivy League and other highly selective colleges and universities.

Not to nitpick here but if their number of applicants has gone up then accepting 10% now versus 20% before could be the same or even more people.

100 applicants in 2004 - 10% = 10 20%=20
500 applicants in 2014 - 10% = 50 20% = 100

They can still grow while shrinking their acceptance rate.

[Philly Fan]

Originally Posted by Baconboy007

Not to nitpick here but if their number of applicants has gone up then accepting 10% now versus 20% before could be the same or even more people.

100 applicants in 2004 - 10% = 10 20%=20
500 applicants in 2014 - 10% = 50 20% = 100

They can still grow while shrinking their acceptance rate.

Of course, but trust me: Penn does NOT plan to increase the size of its entering class. It's been a constant 2400-2500 for at least the past 20-30 years. It's very rare for any of the Ivies to increase its class size, and it's a pretty big deal when one does (e.g., Princeton announced a few years ago that it will gradually increase its entering class size by a few hundred). These schools are all about increasing selectivity, and NOT about increasing the size of their student bodies. Also, your example assumes a five-fold increase in applicants over ten years, whereas it's actually only doubled (which is still impressive). Hence, the halving of the acceptance rate commensurate with the doubling of the applicant pool. I suppose that there could be such an immense increase in the size of the applicant pools for the Ivies and other highly selective schools that they might then consider increasing the sizes of their entering classes, but we're a long way away from that. For example, Harvard and Stanford currently have acceptance rates in the neighborhood of 6% in the face of continually growing applicant pools over the past several years.

Now, back to our regularly scheduled programming (which for YOU means wedding planning) before summers kicks us off the forum.

[summersm343]

[MusicMan84]

Untitled by Music_Man84, on Flickr

Untitled by Music_Man84, on Flickr

[summersm343]

Update from Building Philly



https://www.facebook.com/BuildingPhilly

[FourS]

For me, $1450/month for a studio is insane. My mortgage for a nice sized Victorian row house with a back yard, big front porch, etc. right off of 43rd St. is less than that, but I bought it more than a decade ago. That said, they can probably fill the place at those prices.

In regards to Domus, I've met two people who lived there and both were satisfied. The place has nice amenities (gym, movie theater, etc.). One is a Penn prof and I believe still lives there. The other was a Penn grad student who my wife "tutored" in a stats class. I'm guessing this kid has serious family money because my wife is a statistician (although now she directs a research center and doesn't do much stats any more), not a tutor. She doesn't work cheap.

Comparing buying and renting is pointless, especially in a neighborhood like UCity. A wealthy grad student who plans on living in Philly for 1-4 years is not in the market to buy a place, especially a rambling, 100-year-old place that may be beautiful beautiful but requires a whole lot of maintenance. Neither is a young physician or researcher working 60+ hours a week and barely has time to cook themselves dinner. Totally different markets.