VISION REAL ESTATE MARKET ASSESSMENT

Transcription

1 VISION REAL ESTATE MARKET ASSESSMENT

2 VISION2026 REAL ESTATE MARKET ASSESSMENT The Old City District (OCD) has retained a multi-disciplinary professional planning team led by the RBA Group to prepare a Vision2026, a planning framework for Old City. The Framework is intended to provide OCD with a comprehensive planning document for the neighborhood which outlines a specific, implementation-oriented agenda for future improvement and investment in Old City. As part of this effort, Urban Partners has been retained to conduct a real estate market assessment of the Old City neighborhood. This assessment specifically documents the economic conditions for several key market segments in Old City, including retail, office/ commercial, and housing - both sales and rental. In addition, the document provides a comprehensive inventory of building uses throughout the neighborhood, identifying the degree of activity on the ground as well as the upper floors. From this analysis, the team will identify the types of uses for which adequate demand exists to support new development and the scale of development appropriate for Old City based on the market conditions. It will inform an optimal mix of uses and levels of occupancy in Old City and identify specific locations and sites for which this investment should be targeted. June Market Street Philadelphia, PA prepared by The RBA Group with Urban Partners + Atkin Olshin Schade Architects Christopher Lankenau, principal author

3 2 Use Inventory A key charge of this market assessment was to identify ground-floor uses in all of Old City s buildings as well as the degree of occupancy of their upper floors. In most instances, we were also able to decipher the general use of the upper floors if occupied, whether that be residential, office/commercial, or storage. Ground Floor The ground floor spaces in the buildings of Old City house a surprisingly diverse range of uses, as identified by our inventory of the neighborhood. This is not an exhaustive list of every use and business located in Old City, as many are located on upper floors, but a catalogue of all uses and activities taking place on the ground floors of the buildings throughout the neighborhood. To simplify the analysis of these uses, we have created a series of ground-floor use categories that include residential, art galleries/centers/theaters, museums/religious/educational, semiindustrial, commercial/office, health/wellness, hotel/hostel, bank, and retail (see Table 1). Appendix 1 contains a detailed inventory of these uses arranged by category type, business name (if applicable), and address. Table 1. Major Categories of Ground-Floor Uses, Number of Buildings, and Locations Use Category # of Buildings N of Market S of Market N of Arch S of Arch Art Galleries/Centers/Theaters Cultural/Religious/Educational Bank Commercial/Office Health/Wellness Industrial/Wholesale/Repair Lodging Residential Retail Vacant Total Source: Urban Partners Art Galleries/Centers/Theaters Art galleries, art centers, and theaters occupy the ground floors of 40 buildings in Old City. This category also includes community art centers, performance venues, and 'art house' movie theaters. As whole, these ground floor uses are much more common north of Market Street (about 78% are located there). However, a still-significant number - 42% - reside north of Arch Street as ground-floor uses. Among the 40 arts uses are 31 galleries, for which Old City is well-known. These galleries/studios are heavily concentrated on the Unit and 100 Blocks of the N 2 nd and N 3 rd Task 1.3 Market Assessment

4 3 Street corridors, where 19 of the 31 venues are located. Four more are on Arch Street, while the remaining few are south of Market Street. The three movie theaters are all located south of Market Street as well. The community art centers are concentrated north of Market Street; two are on N 2nd Street and one on N 3rd Street, all below Race Street. Cultural/Religious/Educational Cultural, religious, and educational institutions occupy the ground floors of 58 buildings in Old City. Examined in their entirety, these ground floor uses are slightly more common south of Market Street (about 53%). North of Arch Street are just 16 of the ground-floor uses in this subcategory, or 28%. Museums Museums/cultural facilities constitute a significant ground-floor use subcategory in Old City and include all of the area s museums and historic attractions, of which there are 31. These sites include everything from Independence Hall and the National Constitution Center to the Todd House. The vast majority of these historic sites are located south of Market Street, except for a few like the Betsy Ross House and Elfreth s Alley Museum. The 300 to 500 Blocks of Chestnut Street contain the highest concentration of world-renowned historic and cultural attractions in Old City. Religious Religious institutions include Old City s six historic churches, several of which are regular tourist attractions such as Christ Church and the Arch Street Meeting House. These facilities are positioned on larger parcels between N 2 nd and N 4 th Streets, and are all located north of Market Street. Educational Another subcategory in this use category is educational facilities. Old City has 11 of these types of facilities occupying ground-floor space. Examples include educational tour businesses, schools such as Mastery Charter School and Olde City Day School, and learning centers. Except for two facilities located on N 3 rd Street north of the Ben Franklin Bridge, all of the ground-floor educational-related facilities are situated south of Market Street. Two are located in the ground floor of the Bourse Building. Non-Profit In addition to these other subcategories, there are 8 non-profit organizations located on the ground floors of buildings in Old City. Included in this group are such establishments as the Old City District, American Philosophical Society, and PAWS. Four of the 10 are located north of Market Street but not in any concentrated pattern. Institutional Finally, we are including the United States Mint as part of this ground-floor use category as a major institution. Occupying an entire block on Independence Mall, it is located on the western edge of Old City. Task 1.3 Market Assessment

5 4 Banks Old City is home to seven individual banks that occupy ground floor space. Six of the banks are national chains, while one is headquartered locally. Five of the seven are located on or south of Market Street, three of which are at the corner of 4th and Market Streets. The two banks north of Market Street are on the Unit Block of N 3rd Street, both on the west side of the street. None are located north of Arch Street. Commercial/Office Professional businesses occupy a significant amount of ground-floor space in Old City. These businesses, comprising a range of subcategories including design firms, media and communications companies, real estate firms, and financial companies, can be found in the ground floors of 76 buildings. As a whole, this category of ground-floor use is concentrated north of Market Street, where 79% of these buildings are located (including Market Street itself). Just 36% are located north of Arch Street. Architecture/Design Our field analysis identified 12 architecture and design firms located on building ground floors in Old City. This subcategory also includes engineering firms and clothing designers. All but three of the firms are located north of Market Street. Four of these companies are located on N 3 rd Street below Arch Street and three are on Race Street. Branding/Marketing/Media/Tech Branding/marketing/media/tech firms occupy the ground floor of 17 buildings in Old City. Old City is becoming known as an incubator of these types of creative businesses. They tend to be small at their inception, and thus many are able to be accommodated in relatively small spaces on the first floors and storefronts of Old City's buildings. Once they grow, they often graduate to larger spaces typically found on the upper floors and sometimes occupy multiple floors. A small cluster of these businesses can be found on Church Street, where a single business occupies three separate storefronts, as well a few on N 2nd and N 3rd Streets. In addition, 222 Vine Street contains several businesses within its one-story footprint. Financial/Insurance/Law Businesses within the professional subcategory of financial/insurance/law can be found in ground-floor spaces of 11 Old City buildings. A few of these are located on N 2nd and N 3rd, on various blocks, as well as Arch and Walnut Streets with no discernable patterns. Both Strawberry and Letitia Streets each house a ground-floor firm as well. Printing/Graphics Printing and graphics companies are located in the ground floor of six buildings. There appears to be no obvious pattern in their locations. Task 1.3 Market Assessment

6 5 Real Estate Ten real estate firms occupy the ground floors of buildings in Old City. These companies range from property managers to residential and commercial brokers. Several companies are located on Arch Street, where 225 Arch Street houses four companies alone. Two are located on Chestnut Street. The remaining real estate companies are somewhat scattered. Other Service Businesses The remaining professional uses have been categorized as other service businesses, which occupy 23 ground-floor spaces. These companies encompass a variety of types, including repair businesses, shipping companies, and professional recruitment companies. While a small concentration exists on N 3rd Street, the difficulty to categorize these businesses makes it difficult to identify any concrete patterns of location. However, except for four, all businesses in this subcategory are located on major through-streets of Old City, and just five others are located south of Market Street, three of which are on the 100 Block of Chestnut Street. Health/Fitness Health and fitness-related businesses can currently be found on the ground floor of 22 buildings in Old City. These have been divided into two subcategories: fitness/wellness centers, and health service businesses. Overall, 68% of these ground-floor businesses are found on or north of Market Street, while 41% are north of Arch Street Fitness/Wellness Centers We have identified 12 fitness/wellness centers in the neighborhood, including gyms, yoga studios, and other body-conditioning studios. Just two of these businesses are located south of Market Street. The remaining facilities are scattered throughout Old City. Two are located on N 2nd Street, one on N 3rd Street, and two on N 4th Street - all in the Unit and 100 Blocks. Health Service Businesses The health service business category includes non-fitness uses related to health, including doctor and dentist offices, vets, and out-patient offices. We inventoried 10 businesses of this type in building ground floors. Four of these are located south of Market Street, not including two additional located on the north side of Market in the 300 Block. Two others are located on the north side of the neighborhood in the 200 Blocks of Vine and Race Streets. Industrial/Wholesale/ Repair A diminishing category of ground-floor uses in Old City is industrial/wholesale/repair. Formerly more ubiquitous among the neighborhood's fabric, businesses of this type have slowly left Old City for cheaper land, more space, or have gone out of business all together. National Food Service Equipment and Pincus Brothers are primary examples, where both companies occupied large parcels in the neighborhood that are now vacant. Of the 15 industrial ground-floor businesses existing today in Old City, all are located north of Market Street, and 12 are north of Arch Street in an area centered on N 2nd and Race Streets. Task 1.3 Market Assessment

7 6 Seven of the businesses are located there, including Quarry Street, while the remaining industrial companies are within a couple of blocks of that concentration. Lodging Several forms of lodging exist in Old City as well, including hotels, hostels, and a bed & breakfast. Each occupies the ground floor of its respective building. Of the neighborhood's seven hotels, five are located south of Market Street, four of which are located on Chestnut Street. The bed & breakfast is also south of Market Street on S 2nd Street. Two of the three hostels straddle Market Street on the Unit Blocks to the north and south. The other hostel is on Cherry Street, the only lodging facility located north of Arch Street. Residential Residential is the second most common ground-floor use in Old City after retail. Our inventory identified 230 buildings with residential ground-floor uses throughout the neighborhood. In some instances the ground floor is a residence. In other cases the ground floor is a lobby or stairs to upper floor residences. For this exercise we considered both as residential groundfloor uses. The amount of ground-floor residential uses tallied includes both primary commercial corridors and small predominantly residential streets, such as Elfreth s Alley. As a result, this number is relatively high compared to the other ground-floor uses found in Old City. On the smaller, more intimate streets where rowhouses are most common, ground-floor residential uses are the standard, and are fairly concentrated on these blocks. For the major commercial corridors and through-streets, ground-floor residential uses appear to be concentrated on the fringes of the neighborhood where other ground-floor uses are less common, particularly on the northern end. About 65% of these ground-floor residential uses are found north of Arch Street, while 86% are north of Market Street. Examples are N 2 nd and N 3 rd Streets - Old City s premier commercial corridors. There the ground-floor residential uses are heavily concentrated on the northern ends of each street in the 200 and 300 blocks, north of Race Street. In those areas, the buildings are larger and predominantly more residential in general. The concentration of retail and office is significantly lower in those locations as well. Similar trends can be found on the 100 block of Arch Street - on the eastern fringe of the neighborhood, N 4 th Street on the northern fringe, and along Vine and Wood Streets, also on the northern fringe. Retail By far the most common ground floor use in Old City is retail. The neighborhood has 241 merchants representing 36 categories of retail. This retail supply, as well as retail demand, is discussed in greater detail in the Retail Market section below. In terms of location, retail in Old City is situated on several major corridors in the neighborhood, with N 3rd Street housing the highest concentration (see Table 2). Task 1.3 Market Assessment

8 7 Table 2. Old City Streets with Highest Retail Concentration Street # of Retailers N 3rd Street 52 Market Street 44 Chestnut Street 36 Independence Mall East (Bourse) 22 S 2nd Street 17 Arch Street 16 N 2nd Street 12 S 3rd Street 9 Front Street 6 Race Street 5 Church Street 4 Others 16 Source: Urban Partners N 3rd Street contains 52 retailers, and exhibits a fairly diverse mix of stores. Women's clothing is the most represented retail type on this corridor with nine stores, four of which are south of Arch Street and five north. Other store types with multiple retailers on N 3rd Street and their quantities include four antique stores, four full-service restaurants (two north of Arch Street and two south), four home furnishing stores (three north of Arch Street), and four salon/spas (three south of Arch Street). Other retail uses on N 3rd Street include clothing accessories, a convenience store, florist, furniture stores, dry cleaners, optical store, specialty food stores, and a tobacco store. Market Street has the second-highest number of retailers in Old City with 44. The focus of this corridor is much more on dining and drinking. Market Street houses five bars, 14 full-service restaurants (11 of which are on the 200 and 300 Blocks), and eight limited-service restaurants (6 of which are on the 200 Block). Other retailers represented on Market Street include two convenience stores (on the same 200 Block), a clothing store, dry cleaners, a pet supply store, two mobile phone stores, two salons, and two women's clothing stores. With its 36 retailers, Chestnut Street has the third-highest number of stores in Old City among retail corridors. Like Market Street, Chestnut Street's focus is heavily on dining and drinking, to an even greater degree. There are 18 full-service restaurants on Chestnut Street, 11 of which are on the 100 Block. There are also six limited-service restaurants, mostly on the 200 Block. Chestnut Street has seven bars/lounges fairly evenly spread between along the corridor. Also of note are two tobacco stores on the same 200 Block. Independence Mall East is high on the list of retail concentrations because of the Bourse Building, which houses 22 retailers. The retailers in this facility cater primarily to tourists visiting sites on Independence Mall. As a result, the store selection is heavily focused on food and souvenirs. Of the 22 stores, 14 are restaurants or food-related stores, and 7 are gift/souvenir stores. The other store is a newsstand. Task 1.3 Market Assessment

9 8 S 2nd Street also focuses on food and drink. Among its 17 retailers, this corridor houses six bars/lounges, four full-service restaurants, three limited-service restaurants, and liquor store, and a beer store. All except three of these retailers are located on the Unit Block between Market and Chestnut Streets. N 2nd Street is a direct contrast to S 2nd Street. While there are no bars or restaurants on N 2nd Street, there is a fairly diverse mix of shops, including a book store, a clothing store, a furniture store, two home furnishing stores, Old City's only jewelry store, and two salons. Similarly, Arch Street, with its 16 retailers, contains a diverse mix of retailers as well. These include a convenience store, clothing store, florist, restaurant, full-service restaurant, home furnishing store, two furniture stores, and two salons. Vacant Finally, a fairly common condition in Old City is vacant storefronts. According to our inventory, the neighborhood has 78 vacant ground floors that are completely void of any use discussed above. N 2nd Street leads the way with 15 vacancies, followed by N 3rd Street with 11. Chestnut and Arch Streets each have six storefront vacancies, followed by five on Market Street. In addition, the smaller streets of S Strawberry and S Letitia each have several vacant storefronts. Overall, 62% of Old City's ground-floor vacancies are on or north of Market Street, while 32% are found north of Arch Street. Upper Floors For the upper floor inventory, the primary goal was to identify occupancy versus vacancy status, and attempt to further identify the use if occupied. To accomplish this, as part of our ground-floor inventory, we noted activities taking place on the upper floors of all Old City buildings surveyed. As with ground-floor uses, we have created a series of upper-floor use categories that include art center/studio, hotel/hostel, museum/cultural attraction, parking, residential, restaurant, and vacant (see Table 3). Appendix 2 contains a detailed inventory of these uses arranged by address, ground-floor business name (if applicable), and upper-floor use category. Task 1.3 Market Assessment

10 9 Table 3. Categories of Upper-Floor Uses, Number of Buildings, and Locations Use Category # of Buildings N of Market S of Market N of Arch S of Arch Classroom/Studios Lodging Museum/Cultural Attraction Office/Commercial Parking Residential Restaurant Storage Vacant Total Source: Urban Partners Classrooms/Studios Art center/studio use on upper floors of buildings in Old City are not widespread; there are just eight according to our inventory, but are a present use nonetheless. These are mainly affiliated with ground floor art centers/studios and schools. All upper-floor uses of this type are north of Market Street, except for the Mastery Charter School. Lodging As identified in the ground floor inventory above, there are 11 lodging facilities in Old City. Each occupies the ground floor and the upper floors of its respective building. Of the neighborhood's seven hotels, five are located south of Market Street, four of which are located on Chestnut Street. The bed & breakfast is also south of Market Street on S 2nd Street. Two of the three hostels straddle Market Street on the Unit Blocks to the north and south. The other hostel is on Cherry Street, the only lodging facility located north of Arch Street. Museum/Cultural Attraction Upper floors of museums/cultural attractions in Old City tend to house everything from archives and storage to additional exhibit space. While many of these museums are centered around Independence National Park, a significant number are located north of Market Street, most notably the historic churches. Seven sites are located north of Arch Street, including some on Arch Street itself. Commercial/Office As identified above, professional businesses occupy a significant amount of ground-floor space in Old City. In most cases, those buildings also house offices and commercial space on the upper floors. We identified 63 buildings in Old City with commercial upper-floor uses. Chestnut Street appears to have the most number of building with upper-floor commercial uses with 14, six of which are on the 100 Block. Market Street has eight, and Walnut Street seven. As a whole, this category of upper-floor use is concentrated south of Market Street, where 67% Task 1.3 Market Assessment

11 10 of these buildings are located (including Market Street itself). Just 13% are located north of Arch Street. Parking Parking is a fairly minor upper-floor use in Old City, with just four parking garages existing. One is located north Arch Street on N 2nd Street, while the others are south of Market Street. Residential Residential is the most prevalent upper-floor use in Old City. Our inventory identified 516 buildings with upper-floor residential uses throughout the neighborhood. A few buildings appear to have combined residential and commercial upper uses on their upper floors, but that condition appears to be rare. Upper-floor residential use appears to be concentrated north of Market Street, where 76% of this use is located. Further to the north, above Arch Street, are 46% of residential upper-floor uses in Old City. As with ground-floor residential, we identified upper-floor residential uses on both primary commercial corridors and small predominantly residential streets. On the smaller, more intimate streets where rowhouses are most common, upper-floor residential uses are the standard, and are fairly concentrated on these blocks. For the most part, these are north of Market Street and contribute to the high concentration there. Of the major commercial corridors and through-streets, N 3rd Street has the most number of buildings containing upper-floor residences. The corridor's 84 residentially-occupied buildings are 16% of Old City's total. More than half of those are located north of Arch Street. N 2nd Street has 35 buildings with upper-floor residential, concentrated heavily north of Arch Street as well. Arch Street itself also has 35 buildings with residences on upper floors. Half of these are on the 100 Block. Race Street has 221, mostly in the 200 Block. It appears that Market Street also has a heavy concentration of upper-floor residential uses with 40 buildings. These can be found all along the corridor from Front to 4th Streets. South of Market Street, 25 of Chestnut Street's buildings contain residential uses on the upper floors, concentrated heavily on the 100 Block. Restaurant In several locations in Old City, a ground-floor dining establishment is using an upper floor for additional seating. This appears to be the case for 12 restaurants. All of these are located on or south of Market Street - five are on S 2nd Street, and three are on both Chestnut and Market Streets. Storage While not quite vacant, we counted six buildings in Old City with upper floors used for storage space. This is quite common among the more industrial-type businesses in the district that store parts and excess inventory on the floors above their shops. All of the buildings with Task 1.3 Market Assessment

12 11 upper-floor storage are located north of Market Street, while four of the six are above Arch Street. Vacant Old City also has its share of buildings with vacant upper floors. According to our inventory, the neighborhood has 51 buildings with vacant upper floors. More than 60% have vacant ground floors as well. A few are buildings under construction or rehabilitation, so their vacant status will change shortly. Most of the buildings with vacant upper floors are located north of Market Street (73%), while 31% are north of Arch Street. N 3rd Street has the highest concentration of upper-floor vacancies, with 16 buildings, a pattern that holds true for ground-floor vacancies as well. N 2nd Street follows suit with 10 upper-floor vacancies. Half of N 2nd Street's upper-floor vacancies are between Arch and Market Streets, while the other half are north of Arch Street. On N 3rd Street, 10 of the 16 vacancies are north of Arch Street. The Unit Block of S 3rd Street also has a heavy concentration of upper-floor vacancies, where seven such buildings are located. Similarly, Chestnut Street has seven buildings with vacant upper floors on the 100 and 200 Blocks. Task 1.3 Market Assessment

13 12 Retail Market Urban Partners conducted a retail market assessment to evaluate and describe the current performance of Old City retailers. This analysis is intended for use in identifying opportunities for the further development of retailing in Old City based on the capture of area residents and employees retail purchases. Retail Supply Urban Partners completed an inventory of all retail business establishments located within the boundaries of the Old City neighborhood. The results of this inventory, described by retail type and category, as well as location, are included as Appendix 3. This retail market assessment focuses chiefly on retail stores engaged in selling merchandise for personal and/or household consumption and on establishments that render services incidental to the sale of these goods. Selected service establishments are also included, especially those businesses primarily providing personal services to individuals and households, such as hair and nail salons and laundry and dry cleaning establishments. All retail establishments in the area were classified by type of business according to the principal lines of merchandise sold, the usual trade designation, estimated square footage, and level of sales. All establishments are classified according to the numeric system established for both government and industry practice the North American Industry Classification System (NAICS). Banks and other financial establishments are excluded from this assessment because banking activities deposits, loans, etc. cannot be added to sales volume data for other types of retail establishments. Table 4 lists the major NAICS categories of stores currently available within the Old City study area. As mentioned in the ground floor inventory above, the area includes 241 operating retail businesses representing 36 retail categories. While the area contains a few national chains, the vast majority of retail businesses in Old City are operated by independent entrepreneurs. Table 4. Major Categories of Retailing in Old City Retail Category # of Stores Community-Serving Goods/Services 109 Full-Service Restaurants 53 Apparel 26 Home Furnishings 23 Other Specialty Goods 26 Other Retail Stores 4 Total 241 Source: Urban Partners Task 1.3 Market Assessment

14 13 As the table shows, the majority of these establishments are community-serving stores meeting the everyday needs of nearby residents. Specifically, this store mix includes: 7 convenience stores 1 bakery 2 candy stores 4 specialty food stores 2 liquor and beer stores 1 pharmacy 39 limited-service restaurants 21 bars/lounges 2 general merchandise stores 1 optical store 1 newsstand 1 hardware store 6 florists 14 hair salons/spas 7 laundromats/dry cleaners Restaurants and bars are the stand-out community-serving retail categories in Old City. The restaurant type most typically serving a residential population is limited-service, of which Old City has 39. Limited-service restaurants include coffee shops, pizza parlors, hoagie shops, and other take-out restaurants. Full-service restaurants - those with wait staff - are typically considered a separate retail category due to the farther-reaching customer base that they serve. Old City has 53 such restaurants. While several of these full-service restaurants offer alcohol, establishments that emphasize drinks over food are placed in the separate category of bars and lounges. There are 21 such bars and lounges in Old City. Another major retail category represented in Old City is apparel. This can further be subdivided into several subcategories, such as women's clothing, men's clothing, and shoes. Old City's predominant type of apparel retailer is women's clothing, of which there are 14 stores. In addition, there are four family clothing stores (those that sell both men's and women's, and sometimes children's clothing) and just one store dedicated to men's clothing. There is also just one shoe store in Old City and only one jewelry store in addition to three clothing accessory stores. Home furnishing stores are well-represented in Old City as well. These consist of furniture stores, of which there are five, six antique stores, and "other home furnishing stores", of which there are 12. This retail sub-category includes such stores as lighting, housewares, and kitchenware. "Other specialty goods" is a general category encompassing a variety of store types. In Old City these include cell phone stores, book stores, gift/souvenir stores, pet supply stores, and Task 1.3 Market Assessment

15 14 tobacco stores. Gift/souvenir stores are the most numerous of these types in Old City, which contains a total of 14. As mentioned previously, almost half are located in the Bourse Building. Retail Demand Table 5 summarizes the demographic and economic information for the Old City area necessary to identify retail demand, namely population and total income. For the purpose of this assessment, we are defining Old City's geography as Census Tract 1. Table 5. Population and Income Old City Area Population (Estimate) Per Capita Income (Estimate) 2013 Total Income (Estimate) Geography Census Tract 1 3,399 $84,794 $288,214,806 Source: U.S. Census The table shows an estimated 2013 population of 3,399 for Census Tract 1, which is the latest estimate available. For that same geography, the per capita income is estimated at almost $85,000. Multiplied, the resulting total income figure of over $288 million provides a solid estimate of Old City's spending power. Using information compiled for the Philadelphia region by Sales and Marketing Management, an annual publication by The Nielson Company that tracks retail spending behavior in metropolitan area markets across the country, we calculate that in 2013, the Old City area s population will spent approximately $126 million on retail goods and services (see Table 6), of which: $42 million is spent on community-serving goods and services, $8 million at full-service restaurants, $14.2 million in department stores and warehouse clubs, $17 million on apparel, $22.6 million on home furnishings and improvement, $13.7 million on other specialty goods, and $7.8 million at other retail stores. A key consideration regarding retail spending patterns in Old City is the district s high number of employees in addition to its residents. These employees also patronize local retail businesses and must be accounted for in the trade area s retail demand. Task 1.3 Market Assessment

16 15 Table 6. Estimated Retail Store Purchases Old City Area Residents 2015 Retail Purchase Potential-- Old City Residents TOTAL POPULATION 3,399 TOTAL INCOME ($000) $288,215 TOTAL RETAIL PURCHASES ($000) $125,550 COMMUNITY-SERVING GOODS & SERVICES $42,030 Supermarkets, Grocery Stores $5,674 Convenience Stores $1,032 Meat Stores $70 Fish Stores $17 Fruit & Vegetables $34 Bakeries $14 Candy & Nuts $20 Other Speciality Foods $20 Liquor & Beer Distributors $366 Drug Stores/Pharmacies $14,419 Cosmetics, Beauty Supplies, & Perfume $646 Health Food Supplements $510 Limited-Service Restaurants $7,709 Bars and Lounges $879 Dollar Stores & Other General Merchandise Stores $1,328 Jewelry Stores $2,706 Optical Stores $940 Newsstands $125 Video Stores $99 Gift, Novelty, Souvenir Stores $2,119 Hardware Stores $1,989 Florists $958 Hair Salons $195 Laundries; Dry Cleaning $161 FULL-SERVICE RESTAURANTS $8,042 DEPARTMENT STORES $14,265 Full-Service Department Stores $4,441 Discount Department Stores $5,996 Warehouse Clubs $3,829 APPAREL $17,025 Men's Clothing $1,442 Women's Clothing $3,985 Children's Clothing $678 Family Clothing $6,549 Clothing Accesories $312 Other Clothing $1,057 Shoe Stores $3,003 HOME FURNISHINGS & IMPROVEMENT $22,694 Furniture $2,444 Floor Coverings $983 Window Treatments $55 Other Home Furnishings $796 Household Appliances $602 Radio/TV/Electronics $1,919 Home Centers $7,547 Paint & Wallpaper Stores $1,161 Retail Lumber Yards $6,117 Nursery & Garden Centers $792 Antique Stores $277 OTHER SPECIALTY GOODS $13,734 Luggage & Leatherwork $208 Computer & Software Stores $1,436 Camera, Photo Supply $134 General-Line Sporting Goods $1,361 Specialty Sporting Goods $1,569 Toys & Hobbies $2,103 Sewing, Needlework $465 Music Stores $556 Book Stores $1,809 Record/CD/Tape Stores $978 Office Supply/Stationers $2,496 Art Dealers $439 Collectors' Items & Supplies $180 OTHER RETAIL STORES $7,760 Auto Parts & Accessories Stores $4,070 Pet Supply Stores $803 Tobacco Stores $449 Other Health & Personal Care $691 Other Used Merchandise $607 Other Miscellaneous Retail Stores Source: Urban Partners, 6/2015 $1,140 Task 1.3 Market Assessment

17 16 Old City has several large office buildings on Market Street and the eastern edge of Independence Mall housing a significant number of employees. The district also has retail workers, bank employees, government employees, and a variety of other miscellaneous workers. According to On the Map, a U.S. Census demographic tool, Old City has an estimated fulltime employment population of approximately 7,750 employees. Using data from Office Worker Retail Spending Patterns published by the International Council of Shopping Centers, we estimate that in 2013, the Old City Trade Area s total workforce will spent approximately $23 million on retail goods and services (see Table 7), of which: $16 million is spent on community-serving goods and services, $4 million at full-service restaurants, $2.3 million in department stores and warehouse clubs, $2.8 million on apparel, $3.7 million on home furnishings and improvement, $2.2 million on other specialty goods, and $1.3 at other retail stores such as auto parts and pet supplies businesses. As shown in Tables 6 and 7, a comparison of the two primary sources of store purchases in Old City residents and employees reveals several spending patterns. Residents of Old City spend approximately 33% of their purchases ($42 million) on community-serving goods and services, while the district's workforce spends approximately 50% of its purchases ($16 million) on the same items, including convenience items, drugs/pharmacy items, hair salons, and dry cleaning. Limited-service food items (such as fast food and take-out) also make up a large portion of these purchases. Although these items are typically purchased near the home, they are also commonly purchased near the workplace, either before or after work, or during the lunch hour. Another retail category in which the trade area workforce spends a higher percentage of its overall purchases than trade area residents is full-service restaurants 12% to 6% respectively. Full-service restaurants tend to include the higher end of dining establishments in a given trade area. Considering the sizeable workforce in the immediate vicinity and the selection of quality full-service restaurants in Old City, it s no wonder that the district s employees spend a significant amount of their overall spending on restaurants, most likely at lunch. The remaining retail categories experience higher percentages of total purchases from Old City residents than employees. The Other Retail Categories, including pet stores, auto supply stores, and used merchandise stores, receive the smallest spending from workers as these types of retail purchases tend to be made near the home and not the workplace. Task 1.3 Market Assessment

18 17 Table 7. Estimated Retail Store Purchases Old City Area Workforce Retail Expenditures 2015 Retail Purchase Potential-- Per Employee Old City Employees TOTAL POPULATION 7,750 TOTAL INCOME ($000) TOTAL RETAIL PURCHASES ($000) $4,164 $32,268 COMMUNITY-SERVING GOODS & SERVICES $16,057 Supermarkets, Grocery Stores $395 $3,062 Convenience Stores $444 $3,437 Meat Stores $5 $38 Fish Stores $1 $9 Fruit & Vegetables $2 $18 Bakeries $1 $8 Candy & Nuts $1 $11 Other Speciality Foods $1 $11 Liquor & Beer Distributors $26 $198 Drug Stores/Pharmacies $301 $2,330 Cosmetics, Beauty Supplies, & Per $13 $104 Health Food Supplements $11 $82 Limited-Service Restaurants $577 $4,468 Bars and Lounges $55 $430 Dollar Stores & Other General Me $28 $215 Jewelry Stores $56 $437 Optical Stores $20 $152 Newsstands $3 $20 Video Stores $2 $16 Gift, Novelty, Souvenir Stores $44 $343 Hardware Stores $41 $321 Florists $20 $155 Hair Salons $14 $105 Laundries; Dry Cleaning $11 $87 FULL-SERVICE RESTAURANTS $518 $4,013 DEPARTMENT STORES $2,305 Full-Service Department Stores $93 $718 Discount Department Stores $125 $969 Warehouse Clubs $80 $619 APPAREL $2,751 Men's Clothing $30 $233 Women's Clothing $83 $644 Children's Clothing $14 $110 Family Clothing $137 $1,058 Clothing Accesories $6 $50 Other Clothing $22 $171 Shoe Stores $63 $485 HOME FURNISHINGS & IMPROVEMENT $3,668 Furniture $51 $395 Floor Coverings $20 $159 Window Treatments $1 $9 Other Home Furnishings $17 $129 Household Appliances $13 $97 Radio/TV/Electronics $40 $310 Home Centers $157 $1,220 Paint & Wallpaper Stores $24 $188 Retail Lumber Yards $128 $989 Nursery & Garden Centers $17 $128 Antique Stores $6 $45 OTHER SPECIALTY GOODS $2,220 Luggage & Leatherwork $4 $34 Computer & Software Stores $30 $232 Camera, Photo Supply $3 $22 General-Line Sporting Goods $28 $220 Specialty Sporting Goods $33 $254 Toys & Hobbies $44 $340 Sewing, Needlework $10 $75 Music Stores $12 $90 Book Stores $38 $292 Record/CD/Tape Stores $20 $158 Office Supply/Stationers $52 $403 Art Dealers $9 $71 Collectors' Items & Supplies $4 $29 OTHER RETAIL STORES $1,254 Auto Parts & Accessories Stores $85 $658 Pet Supply Stores $17 $130 Tobacco Stores $9 $72 Other Health & Personal Care $14 $112 Other Used Merchandise $13 $98 Other Miscellaneous Retail Stores $24 Source: Urban Partners, 6/2015 $184 Task 1.3 Market Assessment

19 18 Preliminary Retail Opportunities Based on the Old City area s retail supply and demand from both residents and employees, we can identify several preliminary retail development opportunities for the district in terms of new store types and space (see Table 8). As Table 8 shows, total retail purchase potential is approximately $158 million for the defined Old City area. This calculation is made by adding resident and workforce retail purchases for each retail category. These purchases in turn create demand for store space. While we did not calculate store sales figures or purchase store sales data (due to date limitations at this scale) for this market assessment, we can calculate supportable store space based on resident and workforce demand, as shown in Table 8. Furthermore, we can compare this demand to the current supply of retailers in Old City and approximate additional retail opportunities. Based only on spending by residents and employees, and not taking into account existing retail supply, there is significant supportable store space appropriate for Old City fitting several retail categories, as Table 8 also identifies in detail. These opportunities include 138,000 SF of community goods and services stores; 65,000 SF of apparel stores; 43,000 SF of home furnishings and improvement stores; 41,000 SF of other specialty goods stores; and 24,000 SF of other retail stores. Not all retail categories have development potential, however, in Old City. If there is already significant supply of certain retail types in the neighborhood, for example florists and women's clothing stores, then the demand has likely been met and additional stores of those types are not recommended. Based on the calculated retail demand and observed retail supply in Old City, we can determine additional supportable store space opportunities appropriate for the district. These retail opportunities take into account the availability of existing commercial space, new commercial space currently being planned and developed, and vacant land for future development. The most appropriate retail opportunities for Old City include: 1 small grocery store up to 17,000 SF 1 drug store 20,000 SF (currently being fulfilled by the new CVS store) 1 cosmetics, beauty, perfume store 2,000 SF 1 health food supplement store 1,500 SF 2 jewelry stores totaling 4,000 SF 1 optical store 3,000 SF 1 hardware store 6,000 SF 5 or 6 additional full-service restaurants totaling 15,000 SF 5 or 6 additional limited-service restaurants totaling 15,000 SF 2 men s clothing stores totaling 4,000 SF 1 children s clothing store 2,000 3 family clothing stores totaling 8,000 SF 1 clothing accessory store 1,000 SF 3 shoe stores totaling 6,000 SF

20 19 1 floor covering store 3,000 SF 1 paint and wallpaper store 4,000 SF 1 nursery and garden center 4,000 SF 1 computer/software store 4,000 SF 2 specialty sporting goods stores totaling 6,000 SF 1 sewing and needlework store 2,000 SF 1 toy and hobby stores 2,000 SF 1 music store 2,000 SF 1 auto parts store 6,000 SF 1 other health store 2,000 SF The total appropriate and reasonable new retail space for Old City is approximately 140,000 square feet, occupying a total of approximately 40 new stores.

21 20 Table 8. Total Retail Demand and Development Potential Old City Area

22 Retail Purchase Potential-- Supportable Old City Residents + Employees Store Space (SF) TOTAL POPULATION TOTAL INCOME ($000) TOTAL RETAIL PURCHASES ($000) $157,818 COMMUNITY-SERVING GOODS & SERVICES $58,087 Supermarkets, Grocery Stores $8,736 17,472 Convenience Stores $4,470 11,174 Meat Stores $108 Fish Stores $26 Fruit & Vegetables $52 Bakeries $22 Candy & Nuts $31 Other Speciality Foods $30 Liquor & Beer Distributors $ Drug Stores/Pharmacies $16,749 20,936 Cosmetics, Beauty Supplies, & Perfume $750 2,501 Health Food Supplements $592 1,481 Limited-Service Restaurants $12,177 30,441 Bars and Lounges $1,309 5,238 Dollar Stores & Other General Merchandise $1,543 9,642 Jewelry Stores $3,143 8,981 Optical Stores $1,092 3,641 Newsstands $145 Video Stores $115 Gift, Novelty, Souvenir Stores $2,462 8,206 Hardware Stores $2,310 9,241 Florists $1,113 3,975 Hair Salons $300 2,498 Laundries; Dry Cleaning $248 1,376 FULL-SERVICE RESTAURANTS $12,055 34,443 DEPARTMENT STORES $16,571 Full-Service Department Stores $5,158 Discount Department Stores $6,965 Warehouse Clubs $4,447 APPAREL $19,777 Men's Clothing $1,675 4,786 Women's Clothing $4,629 15,429 Children's Clothing $788 2,250 Family Clothing $7,607 25,356 Clothing Accesories $362 1,207 Other Clothing $1,228 4,092 Shoe Stores $3,488 11,628 HOME FURNISHINGS & IMPROVEMENT $26,361 Furniture $2,840 20,282 Floor Coverings $1,142 3,806 Window Treatments $63 Other Home Furnishings $924 3,081 Household Appliances $699 Radio/TV/Electronics $2,230 6,370 Home Centers $8,767 Paint & Wallpaper Stores $1,349 3,967 Retail Lumber Yards $7,106 Nursery & Garden Centers $921 4,184 Antique Stores $322 1,608 OTHER SPECIALTY GOODS $15,954 Luggage & Leatherwork $242 Computer & Software Stores $1,668 4,764 Camera, Photo Supply $156 General-Line Sporting Goods $1,581 5,271 Specialty Sporting Goods $1,822 6,075 Toys & Hobbies $2,443 8,144 Sewing, Needlework $541 2,845 Music Stores $645 2,689 Book Stores $2,101 8,756 Record/CD/Tape Stores $1,136 Office Supply/Stationers $2,900 Art Dealers $510 2,548 Collectors' Items & Supplies $209 OTHER RETAIL STORES $9,014 Auto Parts & Accessories Stores $4,728 18,184 Pet Supply Stores $933 3,331 Tobacco Stores $521 Other Health & Personal Care $803 2,677 Other Used Merchandise $705 Other Miscellaneous Retail Stores $1,324 Source: Urban Partners, 6/2105

23 22 Commercial Market Old City has several types of commercial office space. For this assessment, we have examined three varieties - traditional office space in large office buildings, upper floors of street-front commercial buildings containing 'creative' office space, and ground-floor commercial space typically containing retailers or galleries. For each we have examined availability and rent levels. Office Buildings The Old City office market contains several office buildings of various sizes, rents, and levels of quality, including the highest quality - Class A. Old City's office market is part of the larger Independence Mall submarket of Center City Philadelphia. To identify the potential for new office development Old City, Urban Partners evaluated current property listings and assessed the market conditions for multi-tenant office space in both Old City proper and the Independence Mall area for comparison. According to City Feet and Loop Net, commercial real estate search companies, each of the large office buildings in Old City had office space vacancies as of June 2015, including both Class A and Class B space (see Table 9). Starting with Class A, the Old City office building with the most available space is the Bourse Building. This 316,000 SF building the largest in Old City - has almost 100,000 SF available for $21.50 to $22.00 per SF per year with a full-service The Bourse Building lease. As Table 9 shows, these rents are in the mid-range for Old City proper. The building offers a newly renovated common areas and restrooms, on-site management, and has the well-known food court on the ground floor as well as direct access to underground parking. It is currently 31% vacant. Constitution Place The other large office building in Old City listed as Class A is 400 Market Street. This 173,000 SF building offers over 29,000 SF of space with such features as an upgraded lobby and common areas, efficient layouts, on-site management, energy-efficient windows, and adjacent garage parking. Rent for the available space in this building is listed at $22.50 per SF per year for a fullservice lease. The building is 17% vacant.

24 23 Table 9. Commercial Listings in Old City Office Buildings, 6/2015 Address Class Total Available SF Building Size SF Min Div. SF Max Contig. SF Listed Rent 111 S Independence Mall E A 99, , ,780 $ The Bourse Building $22.00 Lease Type Full Service 400 Market Street A 29, ,213 1,355 15,529 $22.50 Full Service 325 Chestnut Street B 55, , ,928 $23.50 Full Constitution Place Service 399 Market Street B 11, ,300 Negotiable 11,000 $20.00 Full Colonial Penn Building Service Source: cityfeet.com, loopnet.com % Building Vacant Description 31.4% Many spaces available in the historic Bourse Building on Independence Mall. Amenities include newly renovated common areas and restrooms, on-site management, renovated elevators, 24- hour security, a food court, shops, a full sprinkler system, and direct access to underground parking garage. 17.1% Modern office building with recently renovated and upgraded entrance, lobby, restrooms, and common corridors, and efficient floor plates. The building features new state-of-the-art energy-efficient windows and HVAC system. On-site and adjacent garage parking available. Ground floor contains a bank and restaurant. 27.5% Newly renovated Constitution Place offers modern conveniences in the heart of the historic district. Features include upgrades to the lobby, common areas, elevators, and HVAC system, as well as on-site management, on-site security, 24-hour access, and adjacent parking. Large windows provide fabulous views. Ground floor contains retailers and restaurants. 8.7% Window-lined space with natural light in modern office building on Market Street. Building includes lobby entrance with security desk, 24-hour building access, and 120-person conference room available to tenants. Space is potentially divisible and build-out allowance provided.

25 24 The Colonial Penn Building The remaining two large office buildings in Old City are considered Class B. The largest Class B building with the most available space is Constitution Place at 325 Chestnut Street. This 200,000 SF building has just over 55,000 SF of space available for lease, with a listed rent of $23.50 per SF per year for a full-service lease, the highest in a large Old City office building. This 12-story property offers an upgraded lobby, common areas, and HVAC, on-site management, fabulous views, and adjacent parking. The building also has Cosi and Buddakhan restaurants on its ground floor. It is 28% vacant. The other large Class B office building in Old City is 399 Market Street, known as the Colonial Penn Building. The 126,000 SF building has 11,000 SF of space available at $20.00 per SF per year for a full service lease. The available space in this building has lots of windows and natural light, and includes use of a large conference room. This building is 9% vacant. We also examined available office space in the large buildings on the west and south sides of Independence Mall, considered to be part of the larger Old City office market (see Table 10). All of the buildings in this area with available space are listed as Class A. These buildings include the Curtis Center, Penn Mutual Building (now known as One Washington Square), the Public Ledger Building, the College Physicians Building, and the Federal Reserve Building. The Curtis Center Compared to the Old City office buildings described above, the buildings in the greater Independence Mall office submarket offer higherend amenities and finishes, including private fitness centers, limousine service, concierge service, and interior finishes that include marble floors and plaster ceilings. The buildings are much larger as well, ranging from 271,000 SF at the College Physicians Building to 886,000 SF at the Curtis Center. One Washington Square The Penn Mutual Building, or One Washington Square, has the most available space among these buildings (193,000 SF, or a vacancy rate of 23%) and advertises the second-highest rent at $ $29.50 per SF per year for a modified net lease. The Curtis Center, while redeveloping a portion of the

26 25 Table 10. Commercial Listings in Independence Mall-Area Buildings, 6/2015 Address Class Total Available SF Building Size SF Min Div. SF Max Contig. SF Listed Rent 601 Walnut Street A 134, , ,045 $ The Curtis Center $35.00 Lease Type Modified Gross 190 Independence Mall W A 11, ,428 Negotiable 11,400 $26.50 Full College Physicians Building Service Walnut Street A 193, , ,405 $ Penn Mutual Building $29.50 Modified Net 600 Chestnut Street A 85, , ,482 $24.00 Full Public Ledger Building Service 150 N. Independence Mall A 20, ,000 7,000 20,000 $28.00 Modified Federal Reserve Building Net Source: cityfeet.com, loopnet.com % Building Vacant Description 15.1% Multiple spaces in the historic renovated Curtis Center on Washington Square and near Independence Mall. The building has state-of-the art safety systems, energy-efficient HVAC, and a new elevator system. Amenities include valet parking, limo service, concierge services, and child care. The lobby contains a variety of shops and restaurants as well as a fitness club. 4.2% High-end building on Independence Mall. Building includes floor-by-floor HVAC units, emergency generator, and 24-hour security attendant. Features include a full dining facility, rooftop terrace, and private fitness center with shower and locker facilities. 22.7% Established landmark trio of buildings facing Independence Hall, with polished marble floors, columns, and plaster ceilings. First-class renovations have been made throughout the complex. Expansive windows allow plenty of natural light. A dining facility and bank are located on-site. 16.1% Multiple spaces in the historic Public Ledger Building on Washington Square facing Independence Hall. Home to the General Services Administration and Center City District, the building's lobby, common areas, and elevators were renovated in % Modern office space available in the Federal Reserve Building, located on Independence Mall.

27 26 building into residential condominiums, will retain several floors for office use. This building has over 134,000 SF available (15%), listed at $ $35.00 per SF per year for a modified gross lease. The Public Ledger Building has over 85,000 SF of space available (16%) for $24.00 per SF per year for a full-service lease, which is the lowest of advertised rents among the larger Independence Mall office buildings. The College Physicians Building and Federal Reserve Building have much smaller spaces available and much lower vacancy rates (4% and 3% respectively) than the other buildings discussed. A report examining the Philadelphia-area office submarkets, entitled 2014 Greater Philadelphia Year-End Office Market Report, was recently released by local firm SSH Real Estate. According to the report, the Independence Mall-area office submarket experienced a slight uptick in vacancy from 12.69% at mid-year 2014 to 13.29% by year-end. Class A space faired the best during 2014 in this submarket, with vacancy rates rising from just 9.12% to 9.21%. Class B and C saw a rise from 16.47% to 17.56% by year-end. Current vacancy rates reported in the tables above appear to be higher than the 2014 figures. During the same period in 2014, rents remained static in the Independence Mall office submarket. Class A rents remained at $27.29 per SF per year by year-end, while Class B and C rents dipped a few cents to $21.65 per SF per year. The average office rent in this submarket at the end of 2014 was $24.70 per SF per year. The current asking rents reported in the above tables coincide with these 2014 rents. Compared to other office submarkets in the Philadelphia area, Independence Mall/Old City is doing relatively well. Average rents exceed those found on Market Street East, South Broad Street, and the Navy Yard, and are comparable to West Market Street. Vacancy rates, however, are higher than all of the city submarkets. Old City does very well in rents and vacancies compared to many suburban office markets, including King of Prussia, Malvern, and Plymouth Meeting/Blue Bell. Brokers familiar with the Old City office market report that the vacancy rate in larger office buildings has stabilized and that rents are starting to edge up. They remain optimis tic that conditions will continue to improve. Several factors contribute to this position, including an increasing population in Center City potentially increasing office demand, and the continued conversion of office buildings into condominiums potentially reducing office vacancy. This will soon be taking place at the Curtis Center, and a residential conversion is being considered for the Bourse Building. Creative Office Space Another type of office space we examined due to its proliferation in Old City is creative space, or less traditional office space with unique features housed on the upper floors of the neighborhood's many four to five-story commercial buildings. Table 11 contains a listing of select offices of this type for rent.

28 27 Table 11. Select Creative Office Space Listings in Old City, 6/2015 Address Total Available SF Listed Rent Lease Type Description 36 N. 3rd Street, 2nd Floor 1,500 $28.00 Full Service Second floor space available in classic Old City building with bank on ground floor and residential above. 221 Chestnut Street 1,800 $26.50 Modified Gross 130 N. 2nd Street 1,924 $24.95 Modified Gross 120 Arch Street #3 2,750 $ NNN $ S. 3rd Street 2,340 $ $20.00 NNN Historic 5-story 1860 building renovated in 2000 with elevator. Owner is located on-site. Building is located across from new Museum of the American Revolution. Four separate office spaces in The National condo building. Underground parking available. Commercial space in classic Old City building. Office has beautiful hardwood floors, exposed brick, and large windows facing Arch Street. Unit can be separated into conference room or enclosed office. Large storage area, ceiling fans, and desk dividers included. Creative loft office space available on second and third floors above Menagerie Coffee. Can be divided or delivered as total. 325 Cherry Street, 2nd Floor 2,000 $18.00 NNN Second floor space in historically-certified building complex on quaint Cherry Street. Space includes a private bath and private entrance through a courtyard. 45 N. 3rd Street 4,152 $15.90 Modified Gross 44 S. 3rd Street 650 $15.70 Modified Gross Chestnut Street 2,650 $14.50 Modified Gross Third-floor office space that can be subdivided. Includes two bathrooms. Space currently divided into three offices. Small office space on second floor. Second floor space in historic building with stunning architecture. Property management located on-site. Restaurant and bank on ground floor. 509 Vine Street 2,500 $10.56 NNN Industrial-style space with open floor plan and access to an industrial elevator and delivery bay. Space includes private bathrooms. Off-street parking available. Source: cityfeet.com, loopnet.com As the table indicates, there are a variety of creative office spaces available throughout Old City in every corner of the neighborhood. Except for 509 Vine Street, all of the spaces listed are located south of Arch Street. Four of the 10 listed are south of Market Street; two are on Chestnut Street and two on S 3rd Street. North 3rd Street also has two spaces available. The size of space available ranges from a small 650 SF up to just over 4,100 SF. These spaces are much smaller than those typically available in the larger traditional office buildings, thereby fulfilling a critical size niche in the office market. 36 N 3rd Street

29 28 While most rents are lower than the rents listed for traditional office space, a few are on the higher end or even exceed those rents. Most notably is 36 N 3rd Street, with an asking rent of $28.00 per SF per year for a full-service lease. A limited description was available for the space, but its favorable location on the Unit Block of N 3rd Street is likely playing a role in its price. Another space with asking rent on the high end of the spectrum is 221 Chestnut Street, available for $26.50 per SF per year with a modified gross lease. This space is advertised as renovated with the owner located on-site. It is also located across from the new Museum of the American Revolution. 221 Chestnut Street The listing with the lowest rent is 509 Vine Street, a space in a larger former industrial building, which is advertised for $10.56 per SF per year. More typically, however, the available creative spaces are commanding rents in the high teens. The median rent for the listings in Table 11 is $18.00 to $20.00 per SF per year. These creative office spaces found on upper floors of commercial buildings are in fact renting well and do fulfill a niche in the Old City office market, according to commercial brokers. They suggest that demand is high enough, evidenced by some of the rents, that there's room in the local office market for additional space of this type. The challenge, however, is space limitation in these buildings. Companies seeking spaces greater than a building's typical floor plate often need to seek several floors since large single floor plates are quite rare in Old City. 509 Vine Street Ground-Floor Commercial Space We examined ground-floor commercial space for rent and availability since it is another very common variety in Old City with its many shops and galleries. Table 12 lists select ground-floor commercial space available for rent.

30 29 Table 12. Select Ground-Floor Commercial Space Listings in Old City, 6/2015 Address Total Available SF Listed Rent Lease Type Description 20 S. 3rd Street 500 $43.20 NNN Newly reconstructed retail space with HVAC and high ceilings. Landlord can provide finishes. Located next door to Menagerie Coffee. 105 N. 2nd Street 2,500 $31.20 NNN Up to 2,500 SF of ground floor space with high ceilings in historic building with great corner location. Space can be accessed from both 2nd and Arch Streets Cherry Street 3,000 $26.00 NNN Large double-wide ground-floor space with foot frontage in cast-iron façade building. Space is open and lofty with 13-foot ceilings. Signage visible from N. 3rd Street. 112 Market Street 1,400 $25.50 NNN Available retail space in a residential building on Market Street near Franklin Fountain. 239 Market Street 1,186 $25.28 NNN Market Street store front located next to the new Shirt Corner development. Unit features original pine floors and high ceilings. 320 Walnut Street 3,800 $25.00 NNN Large ground-floor space (1,500 SF in basement) with high ceilings in 70-unit residential building with good exposure. 323 Race Street 3,000 $25.00 NNN Ground-floor space with large, open layout. Building has ornate stone façade, wide frontage, and double-door entry. Onsite parking available. 41 N. 2nd Street 1,500 $25.00 NNN Retail or office space in 4-story mixed-use building across from the Arden Theatre. 243 Chestnut Street 6,500 $24.00 Modified Gross Turnkey restaurant space at corner of S. 3rd and Chestnut Streets. Building has historic exterior with fully fit-out kitchen and interior Market Street 9,000 $23.00 Other Former restaurant space seating up to 180 in restored 5-story commercial building. Space can be developed into first-floor loft-style tech space with high ceilings. 27 N. 2nd Street 4,000 $21.75 Modified Gross Retail space on N. 2nd Street with hardwood floors and exposed brick. High foot traffic area. 8 S. Letitia Street 2,332 $20.00 Modified Gross Large ground-floor space (1,116 SF in basement) with high ceilings, natural light, open work area, conference area, two half baths, and kitchenette N. 3rd Street 1,700 $17.99 NNN Store-front with attractive façade available on N. 3rd Street. Excellent opportunity for a shop, creative office, dance studio, or gallery space. The space has abundant natural light and two full bathrooms. 246 Market Street 4,100 $17.56 NNN Prime retail frontage on Market Street with 36- foot modern facade. Space contains two floors, two dining rooms, and a kitchen, as well as a finished basement with prep kitchen. Building is fully s prinklered Vine Street 3,400 $15.88 NNN Attractive store-front ideal for retail/restaurant or office with 28-foot frontage on Vine Street. Property comes with existing kitchen and bar with liquor license in place. 225 Church Street 5,500 $12.00 Modified Gross Former Sugarmom's restaurant/bar in the basement of historic Sugar Refinery Building.

31 S. Front Street 9,000 $10.67 NNN Available restaurant with office space on ground floor of 4-story mixed-use building (residential on upper floors) at Front and Market Streets. 28 S. Strawberry Street 2,400 $6.50 NNN Flexible commercial space on first floor (1,200 SF in basement) in mixed-use building with residential upper floors. Source: cityfeet.com, loopnet.com, Old City District There are a significant number of ground-floor commercial spaces available for rent in Old City, 18 of which are listed in the table above. Half of these spaces are located on the north side of Market Street and north, and half on the south side of Market Street and south. Four of them are on Market Street itself. N 2nd Street has three available spaces, while N 3rd has one. Four of the 18 spaces are located north of Arch Street. While the majority of buildings with available ground-floor commercial space are on Old City's major corridors, S Letitia and S Strawberry Streets are represented as well. The size of space available ranges from just 500 SF on S 3rd Street up to a large 9,000 SF. In fact, two Market Street spaces of this size are available - one at Market Street, and the other at 4-6 S Front Street. Both spaces housed former restaurants. The median size of available spaces among the 18 listed in Table 13 is 3,000 SF, quite typical for a retailer in a commercial district like Old City. Rents for the available ground-floor commercial spaces vary significantly. More than half of the spaces are asking for rents higher than $24.00 per SF per year, or more than the highest rent listed for the traditional office buildings in Old City. The highest listed rent is $43.20 per SF per month (triple net lease) for the 500 SF space on S 3rd Street. While it is typical for the smallest spaces to command the highest rents per SF, this particular space is also newly reconstructed. The next highest asking rent is $31.20 per SF per year for 2,500 SF at 105 N 2nd Street, which is 105 N 2nd Street the ground-floor space of the Pottery Building. This space is at an excellent location on the corner of N 2nd and Arch Streets, with access from both streets. It is also newly renovated. Another seven available commercial spaces are listed with rents between $24.00 and $26.00 per SF per year, mostly with triple net leases. The locations vary north and south of Market Street. Advertised finishes vary as well, but most if

32 31 not all are in good to excellent condition. $24 per SF per year is the median rent for the listings in Table 12. The least expensive listing is 28 S Strawberry Street. With an advertised rent of $6.50 per SF per year (triple net lease), this 2,400 SF space is described as flexible, with half of it in the basement. Rent jumps to $10.67 per SF per year (also triple net lease) for the large former restaurant space at 4-6 S Front Street. Many of the available spaces were or could be occupied by galleries. Several gallery operators 4-6 S Front Street were contacted to inquire about the rents they pay for their ground-floor space. Based on the asking rents listed in Table 12, as well as the discussions with Old City gallery operators, it appears that rents of ground-floor commercial space are not determined by the use (retail versus gallery) but by the size, amenities, and location of the space.

33 32 Residential Market Sales Housing The Old City sales housing market was analyzed to identify trends in residential real estate and determine the potential for new residential development and its associated pricing. To assess this market, Urban Partners examined recent sales trends of all resale single-family housing in the Old City neighborhood for both owner-occupant and investor-purchased transactions to capture a variety of comparable properties. With many new housing developments underway and/or recently-completed, the assessment also examines new construction housing currently on the market. Recent Sales Trends Owner-Occupied Housing The median sales prices for single-family owner-occupied housing were calculated for a threeyear period between June 2012 and May 2015 (see Table 13, as well as Appendix 4 for a detailed list of all homes sold by address, sale price, and date of sale). During that period, 218 owner-occupied home sales transactions occurred in Old City that were recorded with the City of Philadelphia. Homes include rowhomes, townhouses, and condominiums, although condominiums comprise 93% of Old City's sales transactions for the three years examined. The total median sales price in Old City during the past three years was $347,500, amounting to a median sales price per SF of $ Table 13. Owner-Occupied Home Sales, 6/12-5/15 Area Total Sales Median Sales Price Median Price/SF Old City 218 $347,500 $ Source: Core Logic by Real Quest To evaluate the sales trends during the three-year analysis period, median sales prices were compared between 2012/2013, 2013/2014, and 2014/2015 (see Table 14). Homes were sold at a similar pace in Old City during each of the three years examined. By the year ending May 2015, 76 homes were sold versus 72 sold during the year ending May During the same period, median sales prices dropped from $358,750 in 2012/2013 to $354,500 in 2014/2015, or a net decrease of just 1%. The median price per SF, however, rose by almost 6%, indicating that smaller units were sold during the last year. Table 14. Change in Median Sales Price, 6/12-5/15 Sales Period Total Sales Median Sales Price Median Price/SF 6/12-5/13 72 $358,750 $ /13-5/14 70 $326,500 $ /14-5/15 76 $354,500 $ Change 5.56% -1.18% 5.55% Source: Core Logic by Real Quest

34 33 To gain an understanding of where homes were sold in Old City over the past three years, we compared sales trends north and south of Arch Street. Arch Street practically divides Old City in half, and the area to the north is known for its residential qualities. During the three-year period between June 2012 and May 2015, 124 homes were sold north of Arch Street, compared to 94 homes sold south (see Table 15). While quantities were higher north of Arch, median sales prices were lower by about $44,000, or 13%. Table 15. Owner-Occupied Home Sales by Location, 6/12-5/15 Area Total Sales Median Sales Price Median Price/SF North of Arch 124 $331,250 $ South of Arch 94 $375,000 $ Source: Core Logic by Real Quest However, tracking these sales over time reveals a different story. The pace of sales north of Arch Street has slowed slightly from 2012 to 2015, but the prices have increased. South of Arch Street, the opposite holds true sales have picked up but prices of homes sold have dropped significantly (see Tables 16 and 17). Table 16. Change in Median Sales Price North of Arch Street, 6/12-5/15 Sales Period Total Sales Median Sales Price Median Price/SF 6/12-5/13 43 $320,100 $ /13-5/14 43 $330,000 $ /14-5/15 38 $347,500 $ Change % 8.56% 8.18% Source: Core Logic by Real Quest Table 17. Change in Median Sales Price South of Arch Street, 6/12-5/15 Sales Period Total Sales Median Sales Price Median Price/SF 6/12-5/13 29 $465,000 $ /13-5/14 27 $320,000 $ /14-5/15 38 $367,500 $ Change 31.03% % 0.39% Source: Core Logic by Real Quest As Table 16 shows, total home sales north of Arch Street from June 2012 to May 2015 experienced a net decrease of almost 12%, whereas the median sales price during that period increased by more than 8%. South of Arch Street, as indicated in Table 17, total sales increased by over 31% (after experiencing a slight decrease in 2013/3014) by the end of May 2015, though the median sales price of those sales decreased by more than 20%.

35 34 Investor-Purchased Housing In addition to sales housing purchased by owner-occupants, we examined the investorpurchased housing market in Old City to establish the degree of units being acquired by prospective landlords seeking to rent them to tenants. This helps provide an indication of the rental demand in the neighborhood. Evaluating investor-purchased housing transactions that occurred during the same period as owner-occupied transactions examined above, we have determined that 95 additional transactions were made by investors between June 2012 and May 2015 (see Table 18). This amounts to 30% of total single-family home sales during that period. As the table shows, at $306,000, the median sales price of investor-purchased homes was lower than that of owneroccupied home sales, by an amount of 12.5%. Table 18. Investor-Purchased Home Sales, 6/12 5/15 Area Total Sales Median Sales Price Median Price/SF Old City 95 $305,910 $ As with owner-occupied home purchases, we evaluated the location of investor-purchased homes in relation to Arch Street (see Table 19). During the three-year period between June 2012 and May 2015, 55 homes were sold north of Arch Street, compared to 40 homes sold south. While quantities of investor-purchased homes were higher north of Arch, median sales prices were $83,000 lower a similar trend to owner-occupied home purchases. Table 19. Investor-Purchased Home Sales by Location, 6/12-5/15 Area Total Sales Median Sales Price Median Price/SF North of Arch 55 $290,000 $ South of Arch 40 $372,500 $ Source: Core Logic by Real Quest New Construction In addition to its ongoing supply of resale homes, Old City has a significant amount of new forsale single-family home construction in the pipeline, underway, or recently completed and currently for sale. These include: Walnut Street (four luxury townhomes) 500 Walnut Street (40 luxury condominiums in a high-rise tower) 240 Arch Street the Ross Homes (three luxury townhomes) Church Street 7inSPIRE Townhomes (seven luxury townhomes) S Hancock Street (four luxury townhomes) Front & Quarry Streets (six-unit condominium building) Quarry Street (ten townhomes)

36 Race Street (one single-family semi-detached unit) 5 Bank Street (four townhomes) 233 Chestnut Street (luxury condominiums, including a penthouse suite) 230 Race Street Bread Street Estates (luxury townhomes) Church Street Of these developments, a few are currently listed for sale. Since a significant portion of future housing in Old City will be new construction, it is prudent to examine these listings to understand this market. Currently, two 7inSPIRE townhomes are listed for sale 121 and 125 Church Street. These 4,000 SF homes have 4 bedrooms, 5 full bathrooms, and come with every luxury amenity available, including garage, finished basement, and rooftop deck. The list price is $1.675 million for 121 Church Street, and $1.6 million for 125 Church Street. Two of the luxury townhomes in the 100 Block of Walnut Street 111 and are currently listed for sale as well. These 5,300 SF townhomes have 4 bedrooms and 5 and a half baths. Extraordinary features include an elevator and two-car garage. 111 Walnut Street is listed at $2.6 million, and 113 Walnut is listed at $2.5 million Walnut Street

37 36 Rental Housing Urban Partners examined the rental housing market in Old City to identify the pricing and occupancy of existing apartments as an indicator of opportunities for additional rental housing development in the neighborhood. Old City has a significant amount of rental housing, primarily located in large apartment or converted loft buildings, as well as condominium buildings as rental units. Loft/Apartment Buildings Table 20 details a variety of select apartment buildings with available space for rent. The table identifies the number of units in the building, ranges of rents by apartment size, rent per SF, number of bedrooms and bathrooms, utilities included as part of the rent, availability of apartments, and amenities included with the unit and its building, As the table shows, apartment buildings in Old City are located throughout the neighborhood, and exist in a variety of sizes. The largest building is the well-known Chocolate Works on N 3 rd Street, with 136 apartments. The remaining buildings listed have fewer than 100 units. Some, including Brassworks, Smythe s Corner Units, and Third Quarter Apartments, have less than 20 units. Chocolate Works While some buildings have just one unit type available, such as Brassworks and The Printing House that offer only one-bedroom units, most apartment buildings in Old City offer a variety of unit types. The Berger Building has studios, one-bedroom units, one-bedrooms with an extra half-bath, and two-bedroom units. Similarly, the Waterfront II building has studios, as well as one-, two-, and three-bedroom apartments. Apartment sizes in Old City s buildings appear to be fairly consistent. In most locations, studio apartments are less than 500 SF, one-bedroom units are between 600 and 900 SF, two-bedroom units are between 1,000 SF and 1,300 SF, and the rare three-bed units typically exceed 1,500 SF. Smythe s Corner Units

38 37 Table 20. Select Apartment Complexes in Old City, 5/2015 Building Total Units Rent SF Rent/SF BR BA Available Units Utilities Amenities 24 S. Bank Street 59 $1,210-$1, $2.33-$2.37 0/S 1 1 (6/15) Tenant Restored 19th-century 5-story warehouse building with studios, lofts, and Bank Street Court $1,395-$1, $1.61-$1.88 0/L 1 1 (8/15) pays gas one-bedroom units. Units have fully equipped kitchens, wall-to-wall and carpeting, individually-controlled AC, in-unit washer/dryers, built-in $1,350-$1, $1.79-$ electric dressers, abundant closet space, unique floor plans, and historic details. Pets allowed for a fee. Health club discount available as well. Building offers an elevator and extra storage, and is located on a quaint tree-lined 231 Race Street 12 $1,295-$1, $1.75-$ Tenant Brassworks pays Gas and Electric N. Third Street 55 $1,210-$1, $2.22-$2.23 0/S 1 0 Tenant Crafts House $1,350-$1, $1.53-$ pays Gas and $1,750-$1,925 1,135 $1.54-$ (5/15) Electric $1,950 1,252 $ (8/15) 303 Vine Street 51 $1,410-$1, $1.66-$ /1.5 0 Tenant Penn's View $1,895-$1,985 1,080-1,600 $1.24-$ (7/15) pays gas and electric 222 Race Street 33 $ $2.29 0/S 1 0 Tenant Pfeiffer House $1,295-$1, $1.76-$ (7/15) pays gas and electric 313 Vine Street 27 $1,345-$1, $1.93-$ Tenant The Printing House pays gas and electric Arch Street 12 $1, $2.23-$2.45 0/S 1 0 Tenant Smythe's Corner Units $1,395-$1, $1.89-$ (8/15) pays gas and $1,925-$2,950 1, $1.28-$ electric street and situated around a beautifully landscaped courtyard. Historically-certified and intimate former industrial building containing one-bedroom apartments with bi-level floor plans and private townhouse entrances. Units have fully equipped kitchens, wall-to-wall carpeting, individually-controlled AC, in-unit washer/dryers, unique floor plans, and historic details. Pets allowed for a fee. Restored historic residential complex with custom carpentry consisting of tri-level, bi-level and flat apartment units, some with private entrances. Units feature fully-equipped kitchens with individually-designed cabinets, over-sized bathtubs with whirlpools, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryers, unique floor plans, and historic details. Pets allowed for a fee. Building is located in quiet courtyard setting. A Georgian-Revival former leather tannery restored into single- and bilevel luxury apartments. Units have 16-foot ceilings, wooden beams, expansive windows, and exposed-brick interior walls. Apartments also feature fully-equipped kitchens, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryers, unique floor plans, and historic details. Building has a rooftop deck offering expansive views. Pets allowed for a fee. Limited off-street parking also available for a fee. Restored former industrial Italianate-style building with one-bedroom apartments. Units feature vaulted ceilings, fully-equipped kitchens, wallto-wall carpeting, individually-controlled AC, in-unit washer/dryers, unique floor plans, historic details, and elevator access. Pets allowed for a fee. A former printing facility restored into one-bedroom luxury apartments. Units in this intimate building with doorman feature wooden beams, expansive windows, and exposed-brick interior walls. Apartments have fully-equipped kitchens, wall-to-wall carpeting, individually-controlled AC, in-unit washer/dryers, unique floor plans, and historic details. Pets allowed for a fee. Unique and intimate building - one of the oldest in Philadelphia - containing studios, one-bedroom, and two-bedroom apartments. Units, some bi-level, contain oversized windows making each unit very bright, as well as fully-equipped kitchens, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryers, skylights, large closets, fireplaces, unique floor plans, and historic details. Building has a rooftop deck offering expansive views. Pets allowed for a fee.

39 Church Street 66 $1,250-$1, ,275 $1.25-$ Tenant Sugar Refinery $1,810-$1, ,103 $1.75-$ (5/15) pays Gas and $1,950-$2,850 1,500-1,730 $1.30-$ (6/15) Electric N. 3rd Street 16 $1, $2.35 0/S 1 0 Tenant Third Quarter Apartments $1,425-$1, $1.85-$ /1.5 0 pays gas and $1,795-$2,895 1,008-1,533 $1.78-$ /1.5 0 electric 21 S. Strawberry Street 25 $1,295-$1, $1.92-$ Tenant Trotter's Alley $1,995 1,130 $ pays gas and electric 30 N. 3rd Street 18 $1,355-$1, $1.84-$ Tenant Wistar Alley $1,995 1,050 $ pays gas and electric 231 N. 3rd Street Chocolate Works 136 $1,320-$1, ,250 $1.33-$ (7/15) 5 (8/15) $1,925-$2, ,430 $1.53-$ (5/15) 2 (6/15) 1 (9/15) 33 S. Letitia Street 28 $1,320-$1, ,045 $1.52-$ (6/15) Waterfront I 1 (7/15) $1,920 1,350 $ (9/15) Tenant pays gas and electric Tenant pays gas and electric 106 S. Front Street 13 $1,250-$1, $1.71-$1.81 0/S 1 0 Tenant Waterfront II $1,385-$1, $1.68-$ pays Gas and $1,885-$1,925 1,261-1,441 $1.34-$ Electric $2,495 1,679 $ One of the first factory/warehouse-to-residential apartment complexes in Old City. Units feature fully-equipped kitchens, vintage hardwood floors, individually-controlled AC, in-unit washer/dryers, unique floor plans, vaulted ceilings, exposed brick walls, large windows, and historic details. Pets allowed for a fee. Off-street parking available for a monthly fee. Unique former-factory loft building with gated courtyard entrance containing studios, one-bedroom, and two-bedroom apartments. Building's architectural details include fluted columns, arched windows and an ornate cornice. Units feature fully-equipped kitchens, wall-to-wall carpeting, individually-controlled AC, in-unit washer/dryers, unique floor plans, and historic details. Many units have private decks. Pets allowed for a fee. Historic former department store clustered with other buildings, with a gated entrance leading to an interior courtyard. Units feature fullyequipped kitchens, hardwood flooring, carpeting, individually-controlled AC, in-unit washer/dryers, large windows, vaulted ceilings with beams, unique floor plans, and historic details. Pets allowed for a fee. Originally constructed as two commercial buildings - one with fan-shaped windows - and converted into a single five-story residential building containing two-story one- and two-bedroom apartments and a shared rooftop deck. The units feature fully-equipped kitchens, hardwood flooring, carpeting, individually-controlled AC, in-unit washer/dryers, large windows, vaulted ceilings with beams, unique floor plans, and historic details. Some units have private balconies and terraces. Pets allowed for a fee. Formerly home to the Wilbur Chocolate Company. Five-story residential complex arranged around an interior courtyard contains one- and twobedroom bi-level apartments with skyline and river views. Units feature fully-equipped kitchens, hardwood-like flooring, carpeting, individuallycontrolled AC, in-unit washer/dryers, ample closet space, large windows with custom blinds, vaulted ceilings, exposed brick, and historic details. Top units have skylights and fireplaces. On-site parking and a health club complementary membership available as well. Three separate buildings containing one- and two-bedroom apartments with skyline and river views. Units feature fully-equipped kitchens, hardwood flooring, carpeting, individually-controlled AC, in-unit washer/dryers, ample closet space, columns, exposed brick, and historic details. Top units have skylights and fireplaces. A health club complementary membership available as well. A complex of multiple buildings with ornate treatments, formerly used as shops, residences, and warehouses, consisting of studios, one-, two-, and three-bedroom apartments. Units feature fully-equipped kitchens with specialty cabinets, hardwood floors, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryers, fireplaces in some units, unique floor plans, and historic details. Pets allowed for a fee. Nearby off-street parking and a health club complementary membership available as well.

40 Walnut Street The Green Tree 67 $1,500-$1,600 $1,750-$2, ,021-1,122 $1.85-$1.97 $1.71-$ (5/15) 2 (7/15) Tenant pays gas Apartments $2,150-$2,550 1,282-1,425 $1.68-$ (6/15) and electric 125 N. 4th Street Cherry Street Condos 26 $1,660 $1,660-$1, $2.42 $2.30-$ (7/15) 1 (5/15) 1 (7/15) All included in rent 1 (8/15) Arch Street 43 $1,025-$1, $2.24-$ Heat and Chancery Lane Apartments $1,650-$1, ,136 $1.58-$ (6/15) AC included 229 Arch Street 65 $1,300-$1, $1.73-$1.86 0/S 1 0 Tenant The Berger Building $1,500-$2, $1.82-$ (6/15) pays Gas $1,880-$2, ,000 $2.09-$ (5/15) and Electric $2,200-$2,350 1,100-1,300 $1.81-$ (6/15) 224 Church Street 57 $1,450-$1, $3.20-$3.42 0/S 1 0 Tenant Shirt Corner Apartments $1,600-$2, $2.13-$ pays gas $2,550-$3,100 1,007-1,163 $2.53-$ and electric Elegant recently-renovated building with 24/7 concierge, containing oneand two-bedroom apartments. Building's ornate common areas include detailed millwork, domed ceilings, and custom rugs. Units feature fullyequipped ceramic tile kitchens, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryers, unique floor plans, and historic details. Health club discount offered. Pets allowed for a fee. Modern converted office building (condos and apartments) with elevator, containing one-bedroom apartments. Units feature fully-equipped kitchens with stainless appliances, hardwood floors, high ceilings, individually-controlled AC, and in-unit washer/dryers. Some units contain balconies. Pets allowed for a fee. Historic building with a gated entrance leading to an interior courtyard. Units feature fully-equipped kitchens, tiled baths, hardwood flooring, exposed brick, individually-controlled AC, in-unit washer/dryers, large windows, vaulted ceilings, unique floor plans, and historic details. Building has a rooftop deck offering expansive views. Pets allowed for a fee. Historically-certified building with old-world charm. Building features a courtyard, community room, lounge with bar and kitchenette, rec. room with pool table, and media room, as well as grilling area and bike storage. Units feature fully-equipped kitchens with specialty cabinets, hardwood floors, exposed brick, ceramic bathrooms, large windows, high ceilings, individually-controlled AC, in-unit washer/dryers, unique floor plans, and historic details. Pets allowed for a fee. Nearby off-street parking available at a discount. Brand new construction building with entrance on Church Street, containing studios, one-bedroom, and two-bedroom apartments. Sleek building offers traditional architectural elements. Units feature fullyequipped stainless kitchens, hardwood flooring, custom tiled kitchens, individually-controlled AC, and in-unit washer/dryers. Terraces available for select 5th-floor units. Off-street parking available for an additional fee. Pets allowed for a fee. Source: apts-now.com, rent.com, veryap.com, apartmentguide.com, zillow.com, apartments.com, rentlingo.com, hotpads.com, renthome.com, reinholdesidential.com, turchiproperties.com, and pmcpropertygroup.com

41 40 Rents per SF tend to be the highest for the smallest units. Studio apartments at Bank Street Court and Smythe s Corner Units approach $2.40 per SF. Similarly, studios at Crafts House exceed $2.20 per SF, as do studios at the Pfeiffer House and Third Quarter Apartments. Rents for one-bedroom units appear to range between $1.50 and $1.80 per SF, with some outliers as low as $1.30 and as high as $2.35. Twobedroom units appear to range in rent from $1.30 to $1.70, again with some higher and lower diversions. The highest rents among listed buildings are at the under-construction Shirt Corner Apartments. There, studio apartments will command more than $3.40 per SF. The other unit types in the building one- and twobedroom units also have the highest asking rents for The Crafts House their respective classifications. These range from about $2.15 per SF to $2.70 for one-bedroom units, and $2.55 to $2.65 per SF for two-bedroom units. This brand new building is a good indication of the types of rents that additional new construction buildings in Old City could command. This building also demonstrates that rents in Old City appear to be more influenced by condition and amenities as opposed to location. Since most renters would likely find almost any location in Old City desirable in terms of access, they are most likely focusing on the quality of the space as the determining factor for renting it or not. Amenities offered in Old City s apartment buildings tend to be very similar, whether the unit be located in an apartment building, former industrial loft building conversion, upper floors of commercial buildings branded as a residential complex, or a new construction building. These amenities are Shirt Corner Apartments typically a renovated or high-end kitchen with stainless appliances, tiled bathrooms, hardwood floors, high ceilings, large windows, ornate details if the building is old, in-unit washers and dryers, and central AC. Some units have fireplaces, balconies, private courtyard entrances, and/or rooftop access. Pets are typically allowed and off-street parking is occasionally available. The apartment buildings listed in Table 20 have a combined number of units exceeding 800. Most of the buildings listed have limited apartments available, but some have no vacancies, including Brassworks, the Printing House, Trotter s Alley, and Wistar Alley. Buildings with the most number of units available include Chocolate Works with 13 (10% vacancy), the Green Tree

42 41 Apartments with four (6% vacancy), Cherry Street Condos (15% vacancy), and the Berger Building (8%). These figures demonstrate a very high demand for new and renovated rental housing with high-end amenities in Old City. Individual Rental Units In addition to the units available in the buildings described above, Old City consistently has a similar caliber of apartments available in smaller buildings above ground-floor commercial space, town houses, and condominium buildings. Table 21 provides a sampling of these listings. 319 Vine Street As of June 2015, individual apartments of all types could be found in Old City, including studios, one-bedroom, and two-bedroom units. Sizes range from 580 SF to 2,700 SF. Rents per SF range from $1.13 per SF to almost $3.00 per SF for a large penthouse at the 108 Arch Street high-rise. These units all have similar high-end features as apartments available in the loft buildings listed in Table 20. In fact, it is difficult to find an apartment in Old City that doesn t have some upgraded features, even at the lower end of the rent range. What makes them more affordable are fewer common-area amenities. 108 Arch Street

43 42 Table 21. Select Additional Rental Units in Condominiums and Other Buildings, 5/2015 Address Rent SF Rent/SF BR BA Availability Utilities Amenities 108 Arch Street #1001 $8,000 2,700 $ Jul Tenant pays all utilities Luxury penthouse in newer 108 Arch Street condominium building. Unit features high-end kitchen, designer bathrooms, bamboo floors, large windows, high ceilings, gas fireplace, large closets in each bedroom, individually-controlled AC, and in-unit washer/dryer. An elevator opens directly into unit. One off-street parking space included. 229 Chestnut Street #2 $1, $ Jul Tenant pays electric 319 Vine Street #106 $2,850 1,200 $ May Tenant pays all utilities 315 New Street #606 $1, $ May Tenant pays all utilities 118 Market Street #204 $1, $ Jul Tenant pays all utilities 11 N. 2nd Street #401 $1, $ Jun Tenant pays all utilities 113 N. Bread Street $2,500 1,106 $ Jul Tenant pays all utilities One-bedroom open-concept condo just off Bank Street. Unit offers a modern kitchen with island, hardwood floors, high ceilings, large windows, updated bathroom with jacuzzi, in-unit washer/dryer, and ample closet space. Pets allowed for a fee. Elegant condominium renovated in 2008, with open high-end kitchen, granite tile bath, 14-foot ceilings, hardwood floors, lots of windows, large living room, spacious closets, in-unit washer/dryer, and central air. Building has doorman, secure underground parking, additional storage, and bike storage. Loft apartment at the Bridgeview condos with updated kitchen, high ceilings, large windows, hardwood floors, in-unit washer/dryer, and central air. Renovated one-bedroom loft-style apartment at Old City Apartments. Unit offers large high-end kitchen with breakfast nook, hardwood floors, marble bathroom, and in-unit washer/dryer. Pets allowed for a fee. Recently-renovated apartment in condominium building with elevator, located next to Christ Church. Unit features stainless kitchen with dishwasher, updated bathroom, hardwood floors, large windows, high ceilings, exposed brick, working fireplace, walk-in closet, large in-unit attic storage, individually-controlled AC, and inunit washer/dryer. Cats allowed for a fee. Apartment in The National at Old City condominium building. Unit features stainless kitchen, hardwood floors, large windows, high ceilings, individually-controlled AC, and in-unit washer/dryer. The building has a community room with kitchenette, on-site gym, and bike storage. Pets allowed for a fee. One off-street parking space included.

44 43 9 S. Letitia Street #3 $1, $ Jul Tenant pays all utilities 105 N. 2nd Street #401 $1, $2.09 0(S) 1 1-Jul Tenant pays all utilities 133 N. Bread Street #L1 $2,800 1,432 $ Jun Tenant pays all utilities 315 Arch Street #404 $1,950 1,000 $ Jun Tenant pays all utilities 36 N. 3rd Street #2F $2,950 1,600 $ May Tenant pays all utilities 126 N. 3rd Street #2 $2,750 1,500 $ May Tenant pays all utilities 107 Arch Street $1,875 1,066 $ Aug Tenant pays gas and electric 237 N. 2nd Street #2F $1, $ May Tenant pays all utilities New construction/renovation two-bedroom apartment. Unit offers a high-end stainless kitchen, hardwood floors, luxury bathroom, and in-unit washer/dryer. Cats allowed for a fee. Studio in newly-renovated The Pottery Building. Unit offers modern kitchen with breakfast bar, hardwood floors, carpeted bedroom, tiled bathroom, exposed brick, ceramic bathrooms, large windows, high ceilings, individually-controlled AC, and in-unit washer/dryers. Building has a community room with kitchenette, on-site gym, and bike storage. Pets allowed for a fee. Nearby off-street parking available at a discount. End-unit two-level townhome in quiet, gated community. Unit features spacious gourmet stainless kitchen, hardwood floors, custom lighting, and laundry room. Master suite has walk-in closet and private balcony. One parking space in community garage included. Bright, open apartment in 7-story condominium building with security and keypad entry. Unit has upgraded kitchen with stainless appliances (including dishwasher), lots of windows, in-unit washer/dryer, and large walk-in closet. Tucked-away large apartment with roof deck and included off-street parking. The unit has stainless cook's kitchen open to living area, hardwood floors, large windows, high ceilings, and open design. Pets allowed. Newly-renovated unit with upgraded stainless kitchen, hardwood floors, exposed brick, large bay windows, and French doors. An elevator opens directly into the unit. Restored historically-certified Smythe Stores building with unique cast-iron facade. Unit features vaulted ceilings, fully-equipped kitchens with tile floors, wall-to-wall carpeting, individuallycontrolled AC, in-unit washer/dryer, unique floor plans, historic details, and elevator access. Some units contain fireplaces and balconies. Pets allowed for a fee. Renovated apartment with updated kitchen, high ceilings, hardwood floors, in-unit washer/dryer, and central air, and outdoor deck/balcony.

45 44 70 N. Front Street #2B $1, $ Jul Tenant pays electric 113 Chestnut Street $2,100 1,300 $ Aug Tenant pays all utilities 20 N. Front Street #1A $1,750 1,294 $ Jul Tenant pays electric 259 N. 3rd Street #4F $1,995 1,500 $ Jul Tenant pays all utilities N. Orianna Street #1 Source: hotpads.co $1,800 1,595 $ Jun Tenant pays all utilities Upscale one-bedroom apartment on second floor of 5-story building with elevator. Unit offers modern equipped kitchen with breakfast bar, hardwood floors, carpeted bedroom, tiled bathroom, and inunit washer/dryer. Cats OK for a fee. Building contains additional storage and a gym. Off-street parking available nearby. Renovated apartment with intercom and elevator into unit. Unit offers an updated stainless kitchen, hardwood floors, high ceilings, updated bathroom with jacuzzi, in-unit washer/dryer, and ample closet space. Pets allowed for a fee. One-bedroom apartment in Mercantile Building, a recent residential conversion. Unit enters directly onto Front Street and features high-end kitchen, designer bathrooms, hardwood floors, high ceilings, exposed stone, and in-unit washer/dryer. Pets welcome for a fee. Building contains additional storage and a gym. Off-street parking available nearby. Rare 2-bedroom in newer York Square Condominiums. Unit features high-end kitchen with stainless appliances, tall ceilings, hardwood floors, large windows, spacious closets, in-unit washer/dryer, and central air. Pets are allowed. Large loft space in mixed-use building with separate entrance. Unit has modern kitchen with stainless appliances and concrete flooring, 12-foot ceilings, exposed beams and columns, carpet, in-unit washer/dryer, large walk-in closet. Nearby off-street parking is available for a fee. Could be live-work space.

46 45 New Construction As with sales housing, rental housing in Old City is experiencing a tremendous amount of new construction to keep up with the apparent demand for new high-end product. In addition to the new Shirt Corner Apartments, with its 59 units, several other new rental buildings and complexes are in the pipeline, underway, or soon-to-be completed. These include: N 3 rd Street The National (123 rental units) 205 Race Street (130 rental units) 401 Race Street (216 rental units) Race Street (50-60 rental units) 120 Race Street (8 rental units) 105 N 2 nd Street The Pottery (44 rental units) 320 Walnut Street Walnut Place (66 rental units) 205 Race Street 401 Race Street