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Low Construction Saves Philly Multifamily Market

PHILADELPHIA-The fundamentals in the city's multifamily rental market remain strong, even though the vacancy rate inches toward 3.5%, according to a research report by Encino, CA-based Marcus & Millichap's Philadelphia office. Fewer than 1,500 new units will reach completion this year.

By Marita Thomas | Updated on August 07, 2002

PHILADELPHIA-Low multifamily construction has helped the Philadelphia multifamily rental market avoid deterioration during the economic downturn, according to Jeffrey Algatt, regional manager of the Philadelphia office of Encino, CA-based Marcus & Millichap Real Estate Investment Brokerage Co. His company’s second-quarter Philadelphia apartment market report indicates that just 1,650 apartment units were added here in 2001, which represents a mere 0.5% increase in inventory for the entire MSA.

Fewer than 1,500 will be completed this year, Algatt says, noting that the majority of new units are concentrated Downtown in the Center City area.

Because of the low overall construction rate and Downtown concentration, Algatt says the city’s apartment market “has not suffered from the current economic downturn as much as most of the country.” The vacancy rate has inched up and now approaches 3.5%, according to the study.

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