Radnor Property has started work on a 25-story, $105 million, 280-unit tower at 38th and Chestnut Streets.
Why all the high-rises?
"Young folks get more for their money here" than in Boston, New York, or Washington, says Ira Brown, regional president of M&T Bank, which does business in all four cities. M&T is lending $67 million to build 3601 Market.
Neighborhood vacancies are "below 5 percent," and cheap, streamlined Fannie Mae apartment construction financing makes deals attractive to lenders such as his bank, Brown added.
Philly is cheap, in part, because it hasn't been attracting new employers. But the pending second Comcast Corp. tower across the Schuylkill, as well as the headquarters planned by FMC, the chemical company, will make University City more desirable to young professionals.
"Without a doubt," Brown said. "I think more offices will eventually follow."
Won't this squeeze University City's traditional student landlords?
"There's no saturation. When you develop a good product, tenants come - even with everything that's in the pipeline," developer Todd Potter told me. Potter's firm, University Realty, is currently erecting four low-rise apartment buildings in the neighborhood.
Indeed, David Adelman's University City-based Campus Apartments, which manages 35,000 college-area beds nationwide, including 3,000 around Penn and Drexel, is now trolling for businesses to move to the neighborhood. Having lured partners Josh Kopelman and Chris Fralic's First Round Capital to the original Urban Outfitters store site at 41st and Locust Streets two years ago, Adelman is trying for a repeat at the block-long former Graphic Arts Inc. building at 4101 Sansom St.
The Sansom Street site is just a block from Adelman's new Homewood Suites Hotel, which Adelman says is busy with families visiting the nearby Children's Hospital of Pennsylvania, Penn's Wharton School, and the IRS office. He is also projecting a 12-story office building at 41st and Walnut Streets, if the market holds up.
I asked Adelman why Franklin Square Capital Partners, a company Adelman cofounded with Michael Forman, is building its own 80,000-square-foot headquarters way down in South Philly, at Liberty Property Trust's Navy Yard business park.
It's tough to beat the combination of cheap former government land, free parking, and plenty of space for a gym and other amenities that fast-growing Franklin Square wants to build, Adelman told me.
At least Philadelphia is big enough to give some companies a choice.