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Real Estate Ramblings

James Yoakum's Philadelphia Real Estate Blog

By James Yoakum, SFR | Agent in Philadelphia, PA

Center City Auction Gives Pulse of Local Commercial Market

Yesterday's auction of 1441 Chestnut - a parking lot in Center City that has been awaiting redevelopment for years - gave some good indications of where the local commercial real estate market stands. The property traded hands for $12,000,000, with the winning bidder being one of the partners in the group that already owned the property and had been trying to develop it as a hotel and condo tower.

The main conclusion to be drawn from auctions like this one is that there is still very little demand for speculative properties in Philadelphia, especially vacant land. Even in one of the best locations in the city this property sold for roughly the same price that it traded for in 2000 when its development prospects were much murkier and Center City in general was a less-proven market.

Read a full report on the auction here.

Comments

By Larry Lichtman,  Wed Oct 6 2010, 19:19
That goes to show you how overdeveloped the higher end condo market is right now in Philadelphia. There are still neighborhoods close to Center City that have remained steady and still developing, especially the new con and full gut/renovation properties selling from $200-339K. Philadelphia will soak up the high rise inventory over time. I think those prices may still have to come down to sell out existing inventory.

Look at Marine Club Condos at 1100 South Broad St. They stopped selling them and went back to renting as apartments. So the buyers who paid $220-239K for the 1BR lofts are short selling them now for $150-170K. Eventually prices will meet demand and the inventory will be absorbed by new demand.

Then we'll be ready to develop and grow again. Hopefully, we've learned our lessons, and we grow slow and steady. In a way, it is good. Now the surviving Realtors like us who work in Real Estate FULL TIME will be growing our businesses and proving that lnowledge and experience do matter over time. Here's to those of us still standing. CHEERS. Good Luck!
 
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