A slew of planned investments and appealing demographics
are fueling $1 billion in retail demand for downtown space, according to a
24-page report released this week by the Center City District.
The high demand is being “driven by the downtown core and
its surrounding neighborhoods” and $8.5 billion in planned developments for
Center City before 2019.
The CCD report relies on several statistics, which
commercial real estate services company CBRE, Inc. compiled.
In late October CBRE reported that Philadelphia’s average
prime retail rents stabilized after an 87.5 percent increase over the last five
years. The report cites only one other major U.S. city - Miami - as growing
faster than Philly’s.
The growth, according to the CCD report, is supported by
almost 300,000 downtown workers, a historic number of tourists, and residents
of the “core Center City” area — Vine to Pine, Schuylkill to the Delaware — who
have average household incomes of more than $111,000.
This is complemented by a transit network that deposits a
couple hundred thousand people into Center Cit y every weekday and the general
walk-ability of downtown, which makes shopping and dining easy.
“The report affirms with statistics what we all know and
feel with our gut: that increases in those that live, work and play in Center
City is fueling a seven-day per week retail and restaurant explosion,” said
Steven H. Gartner, Managing Director for Retail Services at CBRE.
The CCD report states that high-end retail, especially
along Walnut Street, has skyrocketed over the last five years — and that demand
is spreading to Chestnut Street and surrounding numbered streets.
A few notable projects: the $325 million renovation of
the Gallery Mall into Fashion Outlets of Philadelphia due to be completed in
spring 2018, and the $600 million, multi-phased East Market project are
creating buzz for the former neglected part of downtown, said the report. It
describes Market Street as east of City Hall and the blocks to the south.
Tourism was another factor fueling the retail demand. The
CCD reported that 41 million domestic tourists visited the Philadelphia region
last year and that the city was second only to New York in its Saturday hotel
occupancy rate (89.6 percent). There are currently six hotels under
construction and four planned for Center City.
Said Paul Levy of the Center City District: “This is not
just a report on trends. This is a powerful magnet for retailers who want to be
in the middle of surging demand. Two of our staff have just spent the last two
days at the International Council of Shopping Centers conference in New York
City talking to retailers who are looking for locations and this report shows
clearly that Philadelphia has what they want.”
More on the ICSC New York Dealmaking Conference and its
impact on the city’s retail scene in Sunday Inquirer’s Business Section.
Source: Philly.com
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