"It's no great secret that the condo market has been soft in recent years," says Dranoff. "Because so many condos have been erected, virtually no one has been focused on rental housing. Over the next three to five years, we see a scarcity of rental housing being developed, and two years ago, we made a decision to shift our development to all-rental."
He adds that in a few years, the company's development pendulum may shift back to for-sale housing. "But the market forces right now favor rentals." For rental housing, the economics are "very different" compared to those for condos, "but we were able to cobble together the right combination of factors to make this project feasible and secure the financing."
Moreover, Dranoff says the rental format made sense given 777 South Broad's proximity to Symphony House. "It gives people a choice of for-sale or rental," he says.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
