University City attracting more development

Thursday, October 3, 2013

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Real estate developers keep moving into University City as the neighborhood continues to evolve as a desirable place to live and work, according to a report issued Wednesday by an area civic group.

More than 6.6 million square feet of commercial or residential real estate is under construction or planned for the area, according to "The State of University City 2013/2014," produced by the University City District. Though opinions vary on neighborhood boundaries, the district defined its borders as the Schuylkill, 50th Street, Spring Garden Street, and Woodland Avenue. The district is a partnership of the area's colleges, small businesses, and residents, with a goal of improving economic vitality and quality of life.

"University City can lead the way for a decidedly more global Philadelphia," district executive director Matt Bergheiser wrote in the report.

The University of Pennsylvania, Drexel University, the University of the Sciences, and a branch of Community College of Philadelphia are in the 2.4-square-mile neighborhood. Children's Hospital of Pennsylvania and the Hospital of the University of Pennsylvania are among the health-care facilities there.

"What is driving our economy now are eds and meds," said Ridge MacLaren of Marcus & Millichap, a real estate investment services firm. "The jobs they are creating there will keep the neighborhood growing."

Since the district released its 2012 report, eight new developments, including 3.0 University Place at 41st and Market Streets and the Dornsife Center for Neighborhood Partnerships at 3509 Spring Garden St., have been planned for the area.

Office vacancy rates in the area dropped to 6.7 percent, two percentage points lower than 2012, according to the report.

Penn and Children's are building in the area, which might spur residential development.

"I don't know anywhere in the country that is growing like this area," said Todd Potter, president of University Realty L.P.

The report projects that the neighborhood will add 1,985 housing units and 4,618 beds by the end of 2015.

Potter said he expected students to occupy at least two-thirds of the new residences, with local families and support staff from the universities and hospitals living in the remaining units.

MacLaren said additional investment in K-12 education would draw more university and hospital staff to live in the area.

Pedestrian counts, which climbed 41 percent over the last five years along the commercial corridor of Baltimore Avenue, and a retail occupancy rate that has remained stable at 89 percent offer an opportunity for more businesses to take root.

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