We apologize if we are being repetitive, but Kensington is booming. Vacant and underutilized parcels are getting snapped up and redeveloped in every direction you look in this neighborhood. Today, we will be focusing on a project west of American St. in South Kensington. We recently brought you a 120 unit mixed-use project on Germantown Avenue and a 93 unit mixed-use development on 2nd Street. There are many other projects nearby bringing a ton of units to the market which we will be covering in the near future.
Just north of the 120 unit project mentioned above is 1613-27 Germantown Ave., a 9,848 square foot Industrial Residential Mixed Use (IRMX) parcel that was purchased by developers in 2016 for $600,000. After acquiring the property, the development team proceeded to demolish the one-story warehouse that stood on the plot in 2017.
The developer secured new construction permits in August of 2018 for a 47 unit mixed-use building. However, their plans changed in September of 2018 to a 40-unit building with 7 commercial spaces, 3 car parking spots, and 40 bicycle spaces. This large number of units seems unusual in a mid-rise building on a lot under 10,000 square feet. The development team is able to fit so many units because they are pursuing micro-units. These small studio-like apartments are geared towards millennials that are seeking affordable rents and do not need a ton of space. As rents have skyrocketed in the Riverwards, it has become difficult for young professionals and couples to afford to rent their own place. The developer hopes to attract this demographic to the building. In 2017, the owner said he would be aiming for $750 rent prices. We expect the rents to be higher as prices in the neighborhood and construction costs have risen in the last two years.
We have been keeping an eye on this development since it was proposed. Ground was broken at the end of 2018. With how quickly buildings are constructed these days, you would expect this structure to be topped out by now. However, since then, only a foundation has been poured and the site has remained dormant otherwise.
We really hope that development starts up again soon on the site. The neighborhood is in desperate need for affordable residential units. This location is also a 0.7 mile walk to the Girard or Berks El Station. So, we appreciate the residential density this project will bring near public transportation. We have heard that some of the commercial spaces may be targeted for co-working offices, but we are not sure if plans have changed since the project was proposed. What businesses would you like to see open here? What commercial amenities do you think the neighborhood needs?
Kyle is a commercial real estate agent at Rittenhouse Realty Advisors, a homeowner, and a real estate investor in Philadelphia. Kyle uses his extensive Philadelphia real estate market knowledge to help his clients buy and sell multifamily investment properties, development opportunities, and industrial sites.
Email Kyle@RittenhouseRealty.com if you are looking to buy or sell a property