PHILADELPHIA-HFF's Jose Cruz, a member of the Industry Leaders panel at the RealShare Philadelphia conference here on Thursday, says Center City multifamily assets are soaring in appeal lately.
"The institutional buyers and owners have rediscovered Philly," Cruz tells GlobeSt.com. "Maybe 'rediscovered' isn't quite the right way to put it, because the institutions have always been there – Prudential, Black Rock, Clarion, and others. But over the last six-to-nine months, multifamily in Center City has become a very, very hot asset class."
As capitalization rates have been squeezed and prices-per-unit have soared in places like Manhattan, Boston and Washington D.C., Philadelphia has come more and more into its own as a prime multifamily market, says the HFF investment specialist.
"With its exceptional medical and educational institutions, new infill restaurant and shop space, the arts amenities in Philadelphia, the institutional investors are really starting to take notice," Cruz says. "There has been a great pick-up in real estate in Center City."
A couple of the building sales HFF handled in the past year – The Sansom Apartments northeast of Rittenhouse Square and The Granary in Logan Square – generated prices that equate to $3-per-square foot of more, he notes.
HFF has two other large Center City apartment building deals in the works right now, Cruz says. The sales price for one of them will be well over $110 million, and the other one is expected to close for around $96 million.
"The money is there," to finance these deals, says Cruz. "Capital is finding the right product, especially in Center City but in some of the suburbs, too."
Cruz and other specialists will discuss the market in general – including all sectors – on their opening panel at the RealShare conference that starts at 8 a.m. at the Union League building.
Another panel at the morning session is devoted to the topic of multifamily growth. Two more panels at take a look at trends in leasing, investment, finance and development; and focus on capital markets.
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