The Millennial generation – those born between 1982 and 2004 – will play a significant role in the Philadelphia real estate market in the next few years, according to experts at a panel put together by a local business magazine. As the Millennial population grows and the Baby Boomer population levels off, developers are investing in central Philadelphia.
Developers are willing to pay the higher taxes that come with a central location in order to lure talented job-seekers. Companies are investing in prime office space in order to attract talented young people.
Retailers are also part of the trend. High rents are not deterring companies like New Balance, Under Armour and Timberland from opening locations in the city.
There is a potential downside. As Millennials get older and start families, many of them may decide to buy homes in locations with lower taxes and better school systems. The experts say politics will be a key factor in keeping the Millennials in the city. One of the experts suggested that the Mayor and City Council need to provide more incentives for developers to locate in areas of the city that could benefit from the investment.
Of course, choosing a location is just the first step in the process of creating a profitable development. Purchasing and developing commercial property in Philadelphia involves negotiating complex financial transactions and navigating a maze of compliance issues. Even before property acquisition, zoning laws must be reviewed and land use issues resolved. Before tenants move in, commercial leases must be negotiated and drafted. Seeking the advice of experienced Philadelphia real estate counsel can help a developer avoid expensive pitfalls.
Source: Philadelphia Business Journal, “Dranoff, real estate experts say future of market depends on Millennials,” Dan Norton, Nov. 14, 2014