Luxury-apartment tower to open Friday at 22d and Chestnut

A 34-story luxury apartment building, 2116 Chestnut, opens to its first tenants Friday, 16 months after ground was broken for the $100 million project.

The 321-unit building is at 22d and Chestnut Streets. Rents include $1,700 for a studio apartment and $1,950 for a one-bedroom.

Although 2116 Chestnut will not be finished for four to six more weeks, tenants will begin moving Friday into its first 14 floors.

"Almost 100 people have rented apartments through our preleasing efforts," said John A. Buck, chairman and CEO of the Chicago development and leasing firm John Buck Co., which bought the property in October 2011. More than 100 units have been leased.

The Indure Fund, a union-backed real estate investment fund managed by National Real Estate Advisors, partnered with Buck on the project. The state also provided financial assistance of about $10 million.

The building, Buck's first in Philadelphia, is on the former site of the Sidney Hillman Medical Center of the Male Apparel Industry Union, operated by the Philadelphia affiliate of Workers United. Buck is building a five-story replacement at Van Pelt and Sansom Streets as part of the agreement for acquiring the Chestnut Street property.

The addition of apartment units to the Philadelphia market comes as "all signals point toward an incipient recovery in the housing market and a correction in the rental market," said economist Kevin Gillen of the Fels Institute of Government at the University of Pennsylvania.

Many people who have been renting "represent a lot of pent-up demand for new housing," Gillen said. "They may have been fine with renting during the recession, but now they're older, possibly married and with kids, and the recovering economy has improved their personal financial situation.

"Rents have peaked, house prices have bottomed, rental supply is also at a peak, and the housing-for-sale supply is nearly back to its historic average," he said.

Even this week's spike in 30-year fixed rates for mortgages, to the nearly 4.5 percent Freddie Mac reported Thursday, is unlikely to block a shift to buying over renting.

Sales contracts for houses nationwide in May reached a nearly seven-year high, according to the National Association of Realtors. In the eight-county Philadelphia region, they were up nearly 18 percent from May 2012.

Source: Philly.com