What’s going on in the Philly luxury condo market this week? Real estate has become a global market. Luxury condos in Philadelphia’s Center City and MidTown mirror national and international trends. In fact our market is now intertwined with the global market. No longer is real estate a local neighborhood industry. Let’s take a look at local news as well as how Philly’s market reflects trends in Manhattan.
Luxury Penthouse Auction at Philly’s Two Liberty Place – The Auction that Wasn’t
Bidding was scheduled to open October 12th for Penthouse 4604 offered at $8.95M with no reserve. Asking price is not relevant to current market values. In fact, 3 bd / 4.5 ba PH #5401 with 2,262 sq ft sold in September for $2.1M. The auction was canceled evidently due to a lack of pre-registered bidders and the Penthouse is still being offered on MLS for $8.95M.
Concierge Auctions is a company I’ve been affiliated with since their breakthrough first auction on Kauai hosted by Neal Norman, my broker at the time. There have been a handful of successful sales in Philly using luxury auctions, but it’s not as common as in resort markets.
The word “auction” related to real estate can be confusing as it’s associated with foreclosures. Think high-end art! If you want to sell a Picasso, how would you approach that? Similarly, for the best national and international exposure for luxury real estate, auction services can be a smart, strategic move. It creates a sense of urgency, and promotes your property to verified high net-worth potential buyers worldwide. Our market is no longer local. The best way to get global exposure may include creative options like a luxury auction.
Supreme Auctions is another resource that I’m proud to present to owners. It’s more of a boutique, high level customized luxury auction service and has a strong presence on the east coast.
Two Liberty Place 40th Floor Views for $600K
At the other end of the spectrum, and currently one of the best values for Center City luxury skyline views at Two Liberty is Unit 4003, a two bd / two bath condo for $600K which finally went under contract this week after 166 days on the market.
There have been 6 sales in the past 6 months at Two Liberty. Two other units are currently under contract; 2 bd #4504 asking price $780,000 and 3 bd #5105 asking price $1,350,000. Based on current offerings, that means Two Liberty Place has improved to almost a balanced market.
Manhattan Condo/Coop Market
While parts of Manhattan felt at times like a ghost town during the worst of COVID vacancies, the Manhattan condo and coop market has recently rebounded. Both sales and rentals are on the upswing and concessions available just a few months ago have completely disappeared. Through my professional networking on Clubhouse, I’ve been learning what’s going on in Manhattan directly from top commercial and residential experts weekly. These updates are the professionals actively negotiating right now, not dated news reports from 2-6 months ago.
Commercial / Retail Impact on Luxury
While Penthouse Views used to define luxury, dynamics at the street level are a key component to today’s definition of luxury lifestyle. For instance, while staying at the W Hotel, your car service drops you off at the door and you’re visiting, not living in the neighborhood.
In Manhattan, both commercial retail and residential sales are strong at Hudson Yards, where an entire community has been created. In other areas of Manhattan where the strongest leasing activity is not retail but ghost kitchens, there’s a dramatic change in the dynamic of the neighborhood lifestyle. Retail windows become tinted for privacy, and bike messengers line for food deliveries.
Will Schuylkill Yards mirror the success at Hudson Yards? Located near Amtrak’s 30th Street Station, one would think there’s a strong positive future for commercial and residential, such as at the FMC Tower at Cira Center South with mixed office / amenity rich AKA’s Hotel Residences.
What’s the future for Philly’s MidTown?
While Philly’s MidTown market in many ways is similar to Manhattan’s, we have yet to see what impact the MidTown Philly commercial market will have on luxury condo offerings. The vacancies in commercial retail and office space in Philly’s MidTown have left streets empty of business people who used to work, dine and shop in the area.
Office space in the core of Center City Philly has been predominantly occupied by the service sector. With Price Waterhouse’s announcement this week of a work from home business model nationally as a leading example, the future of office space for the financial service sector in Philly remains uncertain.
Today’s condo market is rapidly changing, and vulnerable to the impact of work from home office dynamics as well as commercial and retail trends. The story is not over, and we will continue to watch these trends develop and unfold into 2022. Be sure to subscribe to our blog for regular market updates. #AskSusanna