In the mid-19th century, author Horace Greeley exhorted Americans to "Go west young man, go west and grow up with the country." While Mr. Greeley was encouraging people to leave East Coast cities and go west to work the land to create a better future for themselves, those same words could easily apply today for Center City companies deciding where to locate their businesses.
Companies may very well want to go west to University City when deciding where to put down roots. For some, it may very well hold the key to a better or at least a different future.
The real estate market in Philadelphia 's central business district, or CBD, has been anything but dynamic in the past 20 years. Only two office buildings have gone up in that period east of the Schuylkill River: Three Franklin Plaza, which was an expansion need for what is now GlaxoSmithKline and Comcast Center. Because demand and, therefore, rents have been flat over that period of time, landlords have not been able to convince tenants to pay higher, replacement cost rents for new buildings. As a result, virtually nothing new has been built. In fact, our existing trophy towers are changing hands for a fraction of their replacement costs ($350-$400/sf vs. $125-175/sf).
That's not the entire story; however. People are in fact paying replacement cost rents in University City and at the Navy Yard. Why? Because these areas provide intangible benefits that a commodity office building in Center City does not. Read more about this story on PBJ.com
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