PHILADELPHIA | Penn's Landing Redevelopment | 703 - 175 FT | 57 - 12 FLOORS

[Urbanthusiat]

This isn't really a Durst issue so much as it is a interest rate issue. Durst isn't the only developer putting plans on ice in Philly while interest rates are high. Very few large projects are breaking ground, and frankly I don't see why they'd want to finalize a deal and start construction while the cap remains unfinished. And I mean... this was kind of the whole point of raising interest rates, to slow down economic activity to bring inflation down. IDK why people like to single out certain projects when it's a nation-wide issue.

[jaysb]

Originally Posted by Zapatan

It basically just says the project is stalled, which we knew but yea not a good update.

Never really expected this to happen anyway.

Yeah I didn’t really see anything new here. It does state the org is still in negotiation with Delaware River Org. I would have liked to hear an update on that but understand you probably don’t want leaks during that process. I feel like the D River Corp is a pretty competent group so we’ll have to trust they know what they are doing given the size and scope of this project related to the success of a revitalized waterfront.

[jaysb]

Originally Posted by Urbanthusiat

This isn't really a Durst issue so much as it is a interest rate issue. Durst isn't the only developer putting plans on ice in Philly while interest rates are high. Very few large projects are breaking ground, and frankly I don't see why they'd want to finalize a deal and start construction while the cap remains unfinished. And I mean... this was kind of the whole point of raising interest rates, to slow down economic activity to bring inflation down. IDK why people like to single out certain projects when it's a nation-wide issue.

Possibly but I feel like they shut down 300 Columbus before rates went crazy

[UrbanRevival]

Originally Posted by jaysb

Possibly but I feel like they shit down 300 Columbus before rates went crazy

Durst was probably being a bit too conservative regarding the 300 Columbus project. But even if they've been not completely forthright or a bit shady, I'd also agree that this clearly is just the macroeconomic environment the world is in for at least a couple more years. In my view, it's not a bad thing for the city to take a bit of a breather development-wise with larger projects while there's still a lot of uncertainty regarding the next stage of the economy.

There's also thousands more multi-family units coming still-to-come online later this year in other parts of the Philly. It's better for the fundamentals to show that the higher-than-historical-average number of units are still being absorbed to keep vacancy rates in-check. The last thing Philly needs is headlines showing rising apartment vacancy rates and some type of narrative twisting that information, causing developers to shy away completely.

Right now, Philly is actually at a nice equilibrium with rents rising only a few % year-over-year, and units being absorbed at a respectable rate (from what I've seen in recent reports). It's not like NYC, Boston and Chicago, which are seeing unsustainable rent spikes due to crazy shortages, or conversely many of the Sun Belt hubs, that are seeing big supply gluts and decreasing rents. And that's a good thing.

[Johnland]

If inflation is about 3 or 4% and the federal funds rate is currently 5.3%, the real interest rate is about 1 to 2%. When inflation was running at 9% two and three years ago, real interest rates were negative since the fed funds rate never exceeded 5%. The system is so addicted to free money.

[christof]

Interest rates will not be falling anytime soon, and there is a real chance that they will go up before they go down.

Commercial office space construction is going to be DOA for the foreseeable future. Housing and logistics will be the only thing that will be built.

Penn Landing will remain as it was for years to come.

[Jawnadelphia]

^Hasn't stopped a lot of decent mid-sized high rise projects. Also, some developers are still building (look at Pearl Properties, for instance). I think it still all comes down to greed--if there's a will, there's a way.
BPG is building a 14 floor apartment building in little, old downtown Wilmington right now--a developer that felt truly committed to Penn's Landing and Philly for the long term could still get things done.

[TK2001]

Wow I just learned Hill International is involved with the capping...who were the developers of the American Commerce Center. I didn't even know Hill International still existed today

[PHLtoNYC]

Sort of an update, but mostly a lot of nothing...

$2.2 billion Penn's Landing development 'still alive' despite years-long pause
https://www.bizjournals.com/philadelphia...ing-durst-delaware-river-waterfront.html

Still, the project continues to capture the imagination of the developer, the city and the agency overseeing the property, and there is an expectation that it could get a jumpstart if a few external pieces fall into place.

Durst remains in communication with the Delaware River Waterfront Corp., the quasi-public agency that selected the New York real estate firm to develop 7.5 acres between Market and Chestnut streets and nearly 4 acres between Spruce and Lombard streets.

“While the challenging financial market and escalating construction costs have paused the development timeline, the company continues to maintain the property and evaluate future development opportunities,” Durst said in a statement.

Joseph Forkin, CEO of the Delaware River Waterfront Corp., said Durst's letter of intent to develop the property remains in place. The agreement is broad, meaning “as long as we’re talking, this thing is still alive,” Forkin told the Business Journal.

He said the agency “could explore new partners” if discussions stop and Durst loses interest in developing the site.

[BroadandMarket]

Originally Posted by PHLtoNYC

Sort of an update, but mostly a lot of nothing...

$2.2 billion Penn's Landing development 'still alive' despite years-long pause
https://www.bizjournals.com/philadelphia...ing-durst-delaware-river-waterfront.html

Still, the project continues to capture the imagination of the developer, the city and the agency overseeing the property, and there is an expectation that it could get a jumpstart if a few external pieces fall into place.

Durst remains in communication with the Delaware River Waterfront Corp., the quasi-public agency that selected the New York real estate firm to develop 7.5 acres between Market and Chestnut streets and nearly 4 acres between Spruce and Lombard streets.

“While the challenging financial market and escalating construction costs have paused the development timeline, the company continues to maintain the property and evaluate future development opportunities,” Durst said in a statement.

Joseph Forkin, CEO of the Delaware River Waterfront Corp., said Durst's letter of intent to develop the property remains in place. The agreement is broad, meaning “as long as we’re talking, this thing is still alive,” Forkin told the Business Journal.

He said the agency “could explore new partners” if discussions stop and Durst loses interest in developing the site.

Luckily DRWC still owns the land here so they are in charge. Durst's proposal massing was the best of the group but I loved that Hoffman had a music venue, which is just like the wildly successful Anthem venue they have in the DC wharf.

Obviously Durst has the other foundation next to One Water Street which they own along with a few piers North of the BF Bridge. Durst's entrance into Philly has been a disaster though. They closed the marina by Morgan's pier almost immediately. IMO Durst will never build a single thing in Philly and DRWC will rebid it when the park is almost done. Delaware Ave. has been absolutely on fire all the way past Penn's Treaty Park and Durst couldn't finish one tower that nearly touches Old City? They are a landlord company, not a developer.

[Skintreesnail]

I agree, doubt they'll follow through on anything. I wish they would bid it out now though while the momentum is there. Then it could finish some construction around the same time the park does, vs just a decade of construction in the same area.

[mcgrath618]

I'm still disappointed by the Cap itself. It's not even extending south of Walnut to connect with the already-existing Korean War Memorial cap!

[DeltaNerd]

Originally Posted by mcgrath618

I'm still disappointed by the Cap itself. It's not even extending south of Walnut to connect with the already-existing Korean War Memorial cap!

Yeah, I thought we would have a continuous connection between Walnut and Dock st.

Still holding out for the removal of the Lombard st ramp removal and the Market st ramp removal. It's also crazy how bad Delaware ave with speeding cars.

[BroadandMarket]

Meanwhile in Seattle, they tunneled under the waterfront for their highway and build an incredible park in its place:

[DeltaNerd]

Originally Posted by BroadandMarket

Meanwhile in Seattle, they tunneled under the waterfront for their highway and build an incredible park in its place

If we had the Philly BIG MEGA dig. I would bury the BFB interchange, the i676-i95 interchange and possibly bury PATCO to create a waterfront station.

Anyways it's insanely criminal underdeveloped our waterfront is. I was the industrial areas was a bit more consolidated to develop attract waterfronts on both sides of the Delaware river

[PHL10]

Originally Posted by mcgrath618

I'm still disappointed by the Cap itself. It's not even extending south of Walnut to connect with the already-existing Korean War Memorial cap!

The problem is that it could only cap I-95 since there are buildings in the way (Seaport Museum, Hyatt, etc.). But even if you did that, the caps wouldn't align well.

[mcgrath618]

Originally Posted by PHL10

The problem is that it could only cap I-95 since there are buildings in the way (Seaport Museum, Hyatt, etc.). But even if you did that, the caps wouldn't align well.

The cap is more about restitching the streetscape together than anything else. If the section between Walnut and Spruce was only over I-95 and not Delaware, it'd still be a massive improvement.

[Londonee]

Originally Posted by mcgrath618

I'm still disappointed by the Cap itself. It's not even extending south of Walnut to connect with the already-existing Korean War Memorial cap!

Have you been to the site? The scale in person of the project is immense - and the park is going to be massive. So, my concern is less about increasing the size and more about how in God's name are we going to afford to upkeep and program this enormous thing year round to keep it from becoming an encampment. I'm optimistic but it's a HUGE project.

[Skintreesnail]

It would have been nice to have the cap continue south, but i thought i read it was to avoid a requirement for including exhaust systems or something since it's not technically a tunnel under a certain length. I think it's a huge improvement though and will be nice to be able to walk uninterrupted from front to the water. I always thought deleware Ave was scetchy to cross.

[mcgrath618]

Originally Posted by Londonee

Have you been to the site? The scale in person of the project is immense - and the park is going to be massive. So, my concern is less about increasing the size and more about how in God's name are we going to afford to upkeep and program this enormous thing year round to keep it from becoming an encampment. I'm optimistic but it's a HUGE project.

It will be PennDOT's responsibility to maintain structurally, I believe. Not sure who will maintain the gardens and planters above.

Originally Posted by Skintreesnail

It would have been nice to have the cap continue south, but i thought i read it was to avoid a requirement for including exhaust systems or something since it's not technically a tunnel under a certain length. I think it's a huge improvement though and will be nice to be able to walk uninterrupted from front to the water. I always thought deleware Ave was scetchy to cross.

This is true. Wasn't trying to make perfect the enemy of good; the new cap will still be an improvement over what currently exists.