Quote:
Originally Posted by City Wide
I hope this new mall can turn into a similar success (and will cause PREIT do hurry up and build the apartment/condo towers and do something on the other side of Market St.)
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I was legit just thinking the other day that the two Gallery two overbuilds could end up being used for hotel space. The Convention Center has seen a massive uptick in business the last couple of years, to the point where the building no longer lays fallow for long stretches during the middle of convention season and is luring new conventions into its halls e.g. the
Natural Products Expo which will be coming here in 2020, and often contemporaneously (such as today!) hosting multiple small conventions when large conventions haven't rented the entire space.
When the Convention Center was expanded, nobody could justify adding more hotel space because the general consensus was that its
size was not the issue; its
labor was, and adding more space wasn't going to fix the labor problem anytime soon. It was when SMG took over the Convention Center's management that the labor problem got fixed, conventioneers were willing to take a second look at Philadelphia, and decided they liked what they saw.
Now it's started to become apparent that the Marriot, large as it is, is not large enough to handle the convention business, and that some other, similarly-sized hotels are needed in the area, and, as luck would have it, the Gallery II overbuild parcels are right next door.
That said, we are late enough in the current cycle where I don't think we'll see a proposal for a large new Convention Center hotel. But there are about half a dozen parcels where such a hotel could work, and I can easily see two of them get redeveloped during the next RE cycle.
It is also worth noting that the Natural Products Expo East is moving from its longtime home of Baltimore for the simple fact that it's completely outgrown the Baltimore Convention Center, which is basically the same size the PCC was
before its expansion. Baltimore is losing convention business due to its undersized center in general right now, e.g.
Otakon moved to DC a few years back because it outgrew Baltimore's convention center as well, and that was a huge plum we lost because it happened right in between SMG fixing the building's labor issues and the convention industry finding out about such.