PHILADELPHIA (CBS) — A Philadelphia developer has decided to go in a different direction, and will not pursue a hotel/apartment high-rise along the Avenue of the Arts.
A shift in market forces is leading him to high-end condos, instead.
Developer Carl Dranoff, who recently completed the One Riverside luxury glass skyscraper at 25th and Locust Streets overlooking the Schuylkill River Trail, is now planning a 28-story luxury condo building at Broad and Pine with 56 units.
Dranoff Properties Chief Investment Officer Julia Gutstadt says, as they analyzed real estate market, they see a number of apartment, hotel, or hybrid projects are coming online.
“We saw more of an opportunity, and a lack of supply, in the condo market,” she said.
Benjamin Keys, an assistant professor of real estate at the Wharton School of the University of Pennsylvania, says developers like Dranoff always try to peek into the future, and read the tea leaves, on rentals versus condos.
“There’s certainly trade offs there from a financing standpoint, as far as how long they want to be involved,” Keys said.
Keys says with all of the cranes in action in Philadelphia, there are also political considerations.
“In that a neighborhood association might be more amenable to a condo development, relative to hotels or apartment buildings, where there’s more turnover,” he said.
One estimate is that there are about 30 high rise projects going up or being renovated in Philly, defined as any building that is at least 75 feet tall.