PhillyDeals: Apartment rents rise here and sink in Washington

Firms have until Friday to bid to run the Convention Center.
Firms have until Friday to bid to run the Convention Center. (MATT ROURKE / AP)
Posted: May 02, 2013

Apartment rents are going up in metropolitan Philadelphia, even as they fall in the Washington area.

How'd that happen? Washington, with all its military, security, and telecom contractors, was supposed to have become the engine of U.S. economic growth.

But with the federal government slowing down and Philly's hospitals and colleges pushing to grow, each of the two regions is expected to create jobs at roughly the same rate of about 3,000 a month this year, according to federal Bureau of Labor Statistics data.

To house those new workers, big national builders have thrown up so many Washington-area apartments that many units are vacant, according to a report by Delta Associates, of Alexandria, Va.

By contrast, new apartments are so scarce in the Philadelphia area that landlords are more able to name their prices and rents are rising, according to a report from the Philadelphia office of broker Marcus & Millichap.

Developers around Philadelphia "completed approximately 900 apartments over the past year," according to the report. An additional 2,000 units are supposed to be added in 2013, including 240 apartments at Madison at New Britain in Bucks County, and 404 at Bart Blatstein's Tower Place on Spring Garden Street.

Builders in Washington, by contrast, have been adding at least 10,000 units a year since 2010, according to Delta.

The "apartment glut" in the Washington area will drive rents down "as much as 2 percent" this year, according to Delta, even as Philadelphia rents "will rise 2.1 percent this year," according to Marcus & Millichap. Even after that adjustment, Washington rents will still be more than $300 a month higher, on average, than in the Philadelphia area.

Battle for PCC

West Conshohocken-based SMG, Comcast Spectacor's Global Spectrum, and any other firms seeking to run the Convention Center have until Friday to submit their bids to run the state- and hotel-subsidized center.

How will the center's board choose? Its January Request for Proposals listed a string of criteria. The board and its lawyers at Buchanan Ingersoll & Rooney and financial advisers at Public Financial Management will compare the experience and qualifications of the firms' bosses and site managers. Also to be weighed are marketing capabilities, operations, fees and cost-cutting plans, and past track records.

Other cities where SMG and Global Spectrum compete have weighed similar criteria.

In 2011, Chicago picked SMG over Global Spectrum after SMG pulled higher scores in eight out of nine categories, including its management plan, management team, experience, transition plan, marketing, and targets for women and minorities. Global Spectrum won top points in one category: financial stability and capability.

Last year, Knight Center in Miami picked SMG over Global Spectrum after SMG outpointed its rival in five of six major categories. The two tied for the category of "reputation."

One factor that might favor Global Spectrum, given the Philly center's past workforce complications, would be the contracts with the major labor union locals that cover the Convention Center. Those unions do work at the Wells Fargo Center in South Philly, managed by Global. However, ability to work with unionized labor was not one of the factors the Convention Center board listed in seeking bidders.

My colleague Suzette Parmley plans to tell more about SMG and Global Spectrum in Friday's Inquirer.


Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.

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