A recent article from Bisnow.com reports on worrisome shifts in Philadelphia multifamily development. Citing the increasing costs of construction and also the fierce investment competition in Philadelphia, there are worrisome signs that we can learn from.
You and I may not be doing large scale development, but paying attention to the shifting market trends at this level can help us understand both risks and opportunities on a smaller scale.
“I don’t want to be Chicken Little, but we’re nine years into a cycle right now, and cycles are inevitable,” KeyBank Senior Vice President Christophe Terlizzi said. “We don’t know how long this one’s going to last, but it’s one of the longest ones. In my experience, what we have on average is seven-year cycles and five-year memories, and we might be falling for that trap right now.”
“One of the main things we do with our younger developers who didn’t go through the 2007 and 2008 is to protect them from their own worst enemy — themselves,” Banas said. “We’re taking deals away from ourselves by giving five-year fixed rates just to protect these developers in the market.”
What are your Philadelphia real estate investment goals and what trends are you seeing locally? Let’s talk!