I got a chance to pinch-hit for one of my colleagues at work and
address the Urban Land Institute Philadelphia Young Leaders group earlier this week. They were expecting to hear a detailed analysis of
the local residential real estate market, which is my colleague's
specialty, so while I couldn't talk nearly as eloquently as my
colleague, I did feel I needed to touch on the issue.
"Bullish on Real Estate: Philadelphia, 2008" was the title of my
presentation, one I admitted in my introduction might cause the
audience to tune out on account of thinking me either oblivious or
dumb. Hopefully, I am neither; I really do think Philadelphia circa
2008 is a good place and time to buy. Three reasons:
1. Philly's fundamentals are strong. We're not auto-dependent, we
have great natural and cultural amenities, and we're hosting more and
more "cool" events (X Games, MTV Real World, Live 8). Increasingly,
people are going to want to live in places that can be described like
that.
2. Transit-oriented development opportunities abound. As gas prices
rise, locations near transit stops will increase in value. Well, most
of Philly is near a transit line. We have to fix some pretty major
structural issues - high labor costs, taxes, property assessments,
City/SEPTA relationship - but there's momentum to make those fixes.
3. More and more jobs are locating in Philly. The Cira Centre, the
Comcast Center, and the proposed American Commerce Center represent
almost 3 million square feet of office space, that is filled or will
be filled by corporations that are either coming from outside the
region or could have left the region but for the existence of this
brand-new, Class A space. That's a lot of jobs right in the heart of
Philadelphia.
I understand that the subprime meltdown and national lows in consumer
confidence have people feeling quite bearish and skittish. But
long-term, I'm feeling quite optimistic about the City of Brotherly
Love. I've made my investment, and my prediction is that many others
will want to do the same.
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