PHILADELPHIA | Highrise Development Thread X

[Skang]

Originally Posted by Dale

You Philadelphians are spoiled for height. I just got back, from Denver, which has added two 500-footers in the last FORTY years!

Philly's economy is struggling compared to Denver, with notably slow activity for a mid-sized somewhat large city.

[reparcsyks]

Originally Posted by PHLtoNYC

The gateway to Market West is for sale. Its next chapter could transform Center City
https://www.bizjournals.com/philadelphia...market-west-residential-conversions.html

The hulking Centre Square office complex is mostly vacant — an albatross around the neck of Philadelphia’s post-pandemic downtown recovery. While embroiled in a drawn-out foreclosure case, the city’s largest office property is now up for sale.

At 1.76 million square feet, Centre Square could become one of the largest office-to-residential conversions on Market Street. The seeds are already being planted for a swelling downtown population as vacant and distressed office buildings along the corridor are pursued for partial or full conversions into apartments.

This is probably way too large for the Post Bros, but they could create something amazing here.

[Dale]

Originally Posted by Skang

Philly's economy is struggling compared to Denver, with notably slow activity for a mid-sized somewhat large city.

Denver metro is growing. Downtown Denver has been struggling for years with virtually no construction that I could see.

[Skang]

What's the chance of Philly breaking ground on a high-rise this year, considering several projects are on hold

[Zapatan]

It's insane how little construction has happened in so many US cities in the recent years.

[Skang]

Originally Posted by Zapatan

It's insane how little construction has happened in so many US cities in the recent years.

Unless it’s New York City, Miami, Austin , Charlotte, Nashville , what city are you from?

[PHLtoNYC]

Originally Posted by Zapatan

It's insane how little construction has happened in so many US cities in the recent years.

New construction meaning high-rises?

Philadelphia had a large amount of high-rise and low/mid-rise construction in recent years. New high-rise construction slowed down after the abatement was revised (2023?). There is still a fair amount of small and mid-size projects and adaptive re-use, but new high-rise construction is mostly halted.

Nationwide, there aren't many high-rises breaking ground anywhere these days, except New York City and Miami.

[Dale]

From the standpoint of a skyline aficionado, there’s nothing wrong with a little lull so as to be able to take in the skyline in its unboxed state.

But obviously there’s lots going on in DT Philly otherwise.

[bdurk]

I think there's a pretty slim chance we see a 500+ foot building kick off before the end of the year or even maybe through next year. Even though interest rates dropped slightly I don't see them dropping any further and it doesn't seem like any of the big developers in the area have any plans of starting any huge projects anytime soon.

[Dale]

The developer of Harper Square said in July he was breaking ground “in short order.”

We’ll see, but there’s no evil curse hanging over Philly.

[3rd&Brown]

Originally Posted by PHLtoNYC

New high-rise construction slowed down after the abatement was revised (2023?). Nationwide, there aren't many high-rises breaking ground anywhere these days, except New York City and Miami.

It's a dangerous misattribution to blame the lack of new construction on the phase out of the abatement. Although phasing out the abatement certainly doesn't help, it's my firm belief that the abatement increases land values more than anything else (we've all seen developers get zoning changes on pie in the sky proposals then flip the land for significant profit). If anything, it will just bring down land values and the numbers will pencil out in the same way.

If you pay too much for your land, regardless of incentives, you're project is not going to pencil out.

The real culprit for the slowdown in new construction is 1. tariffs on construction materials, 2. uncertainty around #1, 3. high interest rates, and 4. the sinking economy.

The abatement would be #5 at most.

[3rd&Brown]

Originally Posted by Skang

Philly's economy is struggling compared to Denver, with notably slow activity for a mid-sized somewhat large city.

You are this forum's new resident Negadelphian.

[Dale]

I need to spend more time on this page. I’m in Charlotte, but I’ve spent more time in Philly than in any city I’ve never actually lived in.

[PHLtoNYC]

Originally Posted by 3rd&Brown

It's a dangerous misattribution to blame the lack of new construction on the phase out of the abatement. Although phasing out the abatement certainly doesn't help, it's my firm belief that the abatement increases land values more than anything else (we've all seen developers get zoning changes on pie in the sky proposals then flip the land for significant profit). If anything, it will just bring down land values and the numbers will pencil out in the same way.

If you pay too much for your land, regardless of incentives, you're project is not going to pencil out.

The real culprit for the slowdown in new construction is 1. tariffs on construction materials, 2. uncertainty around #1, 3. high interest rates, and 4. the sinking economy.

The abatement would be #5 at most.

You are putting words in my mouth...

I didn't blame anything on the abatement, I pointed out the timeline... I also mentioned a national slowdown, which should have hinted that its not Philadelphia specific, due to a multitude of factors (due to the reasons you mentioned, and also, but to a lesser extent, the abatement, all of which I figured was known in this forum).

I stated that not all construction has slowed down in Philadelphia, just high-rises.

[UrbanRevival]

Originally Posted by Skang

Philly's economy is struggling compared to Denver, with notably slow activity for a mid-sized somewhat large city.

It amazes me how much this "bad Philly economy" narrative refuses to die.

It actually has nothing to do with the a "struggling economy," as every indicator shows Philly is doing extremely well on the job growth front compared to most other metro areas. According to the latest BLS numbers, it's behind only the NYC metro for numerical growth and is 4th in percentage growth amongst 1 million+ metro areas.

Instead, it has everything to do with economic trends moving away from the need for traditional offices. That's very much not Philadelphia-specific:

As Philadelphia emerged from the economic slump of the pandemic, job growth in the city boomed compared other large urban centers across the country, according to a new analysis of federal employment data.

The increase in jobs was bolstered by the recovery of arts and entertainment organizations, hotels, restaurants and other service industry firms over the past five years, along with the long-term growth of hospitals and other healthcare providers, per a report by the Center City District business association (CCD).

...

Employment has recovered much more robustly since 2020 than it did after the Great Recession of 2008-2009, suggesting “certain fundamentals” in Philly’s economy are stronger than they were before, CCD said.

At the same time, the report notes that local employment in office sector fields like finance and real estate has remained nearly flat, which along with a shift to working from home has contributed to continued high office vacancy rates in the business district.

The employment increases have been insufficient “to meaningfully stabilize or advance Center City’s commercial office sector,” it said.

https://billypenn.com/2025/09/17/philly-job-growth-is-up-but-many-downtown-offices-remain-vacant/

[BroadandMarket]

Also it's not fair to compare high rise construction in Austin/Dallas/Nashville to Philly. Compare it to Boston or Chicago but construction is just so much cheaper in these sunbelt cities when they can just buy a fully vacant city block or surface parking lot and do a parking podium without ever digging underground.

Philly has small streets, small blocks and small footprint buildings so it's expensive to assemble lots and expensive to build. These cities will never have what Philly has at street level. Keep the mid rise infill coming and then the towers will come later.

Jewelers Row, old Wendy's, Walnut Rite Aid and Harper Square are the most important towers we need to see soon IMO. They are all terrible eyesores.

[PHLtoNYC]

Originally Posted by BroadandMarket

Also it's not fair to compare high rise construction in Austin/Dallas/Nashville to Philly.

Jewelers Row, old Wendy's, Walnut Rite Aid and Harper Square are the most important towers we need to see soon IMO. They are all terrible eyesores.

The point I was trying to make earlier is that the pipeline for high-rise construction IS in fact slowing down in all of those cities.

It's a national trend, and only New York City and Miami seem to be detached from internal US economics.

And agree, hopefully one of those towers starts soon, the unnecessary vacant lots are eyesores.

[Redddog]

Originally Posted by PHLtoNYC

The point I was trying to make earlier is that the pipeline for high-rise construction IS in fact slowing down in all of those cities.

It's a national trend, and only New York City and Miami seem to be detached from internal US economics.

And agree, hopefully one of those towers starts soon, the unnecessary vacant lots are eyesores.

I thought i remembered the Jewelers Row thing to be moving forward.

[skyhigh07]

Originally Posted by Dale

Denver metro is growing. Downtown Denver has been struggling for years with virtually no construction that I could see.

Coincidentally, I live in Philly but am staying in Denver for a few weeks. I haven’t been here for ages and was amazed by how much downtown and the city’s core have changed over the last decade. The redevelopment of Union Station should serve as a national model on how to redevelop an old train station. I was blown away. The area around it seems to have attracted a lot of high end hotels, restaurants and mid rise development.

That being said, apparently Downtown Denver still lags behind most other cities in terms of rebounding after COVID. There was a recent article in the Denver Post lamenting how bad things have gotten. I was still very impressed but then again I didn’t really explore the office district and never saw it at its zenith.

Link to Denver Post Instagram article:

https://www.instagram.com/p/DKPmINszWBK/?img_index=2&igsh=MWo2dHM4bjNybGgzbw==

[Dale]

Originally Posted by skyhigh07

Coincidentally, I live in Philly but am staying in Denver for a few weeks. I haven’t been here for ages and was amazed by how much downtown and the city’s core have changed over the last decade. The redevelopment of Union Station should serve as a national model on how to redevelop an old train station. I was blown away. The area around it seems to have attracted a lot of high end hotels, restaurants and mid rise development.

That being said, apparently Downtown Denver still lags behind most other cities in terms of rebounding after COVID. There was a recent article in the Denver Post lamenting how bad things have gotten. I was still very impressed but then again I didn’t really explore the office district and never saw it at its zenith.

Link to Denver Post Instagram article:

https://www.instagram.com/p/DKPmINszWBK/?img_index=2&igsh=MWo2dHM4bjNybGgzbw==

I enjoyed my time in Denver. Union Station was impressive. But come on, your 30th St station. I was also impressed by the activity at night, block after block of al fresco dining, albeit on specific streets. But yes, dead overall. Office towers are being snapped up, for pennies on the dollar, to be converted to apartments.