Real Estate of Two Cities: Boston vs. Philadelphia

With Superbowl LII a few days away, the New England Patriots and the Philadelphia Eagles’ respective cities are more alike in other ways than football: real estate. While Boston is a commercial real estate mecca and the other is still upcoming compared to the latter.

Commercial Leasing

Boston

Greater Boston has over 210 million square feet of office space and 11% vacancy, with the city of Boston toting only 11.1 million square feet and a 2.5% vacancy at the end of 2017.

Philadelphia

The Greater Philadelphia area is seeing an increase in rent of market space due to popularity in the city’s suburban areas. Greater Philadelphia has a 13% vacancy while the city has 10.9% vacancy.

 

Residential Leasing

Boston

Boston remains one of the highest places to rent a one bedroom apartment. The rent is nearly a quarter higher than the rest of the country. Boston Mayor Martin Walsh is looking to add 53,000 more units to the city by 2030 and is currently building Boston’s tallest residential complex in it’s Back Bay neighborhood, projected to be 740-feet-tall. When it comes to building multifamily units, Boston is lagging behind the rest of the country.

Philadelphia

Although Philadelphia is still one of the most affordable cities on the east coast, new land developments is slowly increasing rental rates. Majority of the affordability in Philly are linked to its lower-income based neighborhoods. The city has more single-family houses than apartments, and even a construction boom will not change that because of the size of the city.

Life Sciences

Boston

Boston is #1 for the life sciences and is the largest-funded by the National Institute of Health (NIH). Available lab space is at a bare minimum, with a less than 1% vacancy in the Cambridge area and 3% vacancy in the Greater Boston area.

Philadelphia

While Philadelphia simply cannot compare to Boston’s life sciences market, it’s efforts are impressing. The University City Science Center is home to incubation center, the rent is lower than in Boston with many labs available for rental.

Industrial

Boston

For the first time in a long time, the Boston supply and demand for industrial rent. The vacancy for the Greater Boston area is at 7%. Warehouse developers are now looking into when to start building multistory warehouse units in Boston.

Philadelphia

South Philadelphia is home to Lehigh Valley and South Jersey, the country’s largest industrial complexes. With never-ending construction in the areas, the supply of warehouse space is struggling to meet the demand. The premiere location on the east coast will keep Philly a key player in the industrial sector.

Retail

Boston

Newbury Street is still the center of commerce for tourists and neighboring areas are spilling over with shopping center. Developers think Boston may still be under-retailed.

Philadelphia

While Philly remain a nation hot spot for food and beverage, retail is looming behind with King of Prussia mall still being the #1 shopping destination. However, many neighborhood shopping centers in suburban Philadelphia are scarce outside of restaurants.

Amazon 2nd Headquarters?

Boston

Boston’s talent in tech and universities make the city a leading competitor for Amazon’s second headquarters. However, housing affordability serves as a downfall. The city is using this as a way to upgrade it’s transit and build more housing units.

Philadelphia

Philly has great tech talent, is more affordable, diverse and is located to CEO Jeff Bezos’ home in Washington, D.C. Although the city of brotherly love has a great transit system, Amazon is unsure if 50,000 new employees will be an asset or liability to the strain on public transportation.

-Allen A Garzone II, Garzone Real Estate, Inc, Boston Real Estate Agent

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