The 30,817 square foot IRMX zoned lot at the intersection of Emerald and Hagert streets in Kensington had a long history as a textile factory. Providence Dye Works and later Hart & Foster Dyers & Finishers called 1924-44 E. Hagert St. their home for a 100+ year period when this area of Philadelphia was called The Workshop of the World. We are not sure when the building that once stood at this address was demolished, but this lot has sat vacant and blighted for more than a decade.
We noticed that 1924-44 E. Hagert St. hit the market for $11.5 million in September of 2018. The listing went under contract in December of 2018. We heard that the sale is due to settle in June.
This is an extremely attractive parcel for developers for a bunch of reasons. The lot is in a growing neighborhood, is close to a bunch of amenities, and is right next to the El. Its IRMX zoning also allows dense mixed-use development to proceed by-right. The cherry on top of all of this is that this plot is located in a Federal Opportunity Zone. The Opportunity Zone designation provides investors with capital gains tax deferrals at the time of purchase. For example, an investor can sell a stock portfolio and invest their gains in an Opportunity Zone property without paying capital gains taxes on the stock sale. If the investor holds the property for 10 years and then sells it, the profit on the sale of the property will not be taxed and the capital gains taxes on their original stock profits will be forgiven. As you can imagine, investors are excited to take part in this program. We imagine whoever is behind the project at 1924-44 E. Hagert will be taking advantage of these benefits.
Construction permits were pulled for 1924-44 E. Hagert St. on May 2nd for the construction of 147 residential units, artist studios, 45 car parking spaces, and 71 bicycle spaces. Being so close to the York-Dauphin El Station, we think this is a fantastic project. As we have stated before, we need to add residential density near public transit if we want Philadelphia to keep growing and to stay affordable. New residents are going to continue to want to live along the train line. If we do not build more units for them, they will displace existing residents and cause increased rents and home prices. A large apartment building will help fuel local businesses along Front St. and Frankford Avenue. This project will also fill in a blighted lot, which should be great for nearby neighbors.
There is another large lot just across Boston St. from this project that is also zoned IRMX. This lot is also pending sale and was marketed by the same company that marketed 1924-44 E. Hagert St. We have not seen any permits pulled for the second lot, but we expect development to proceed there as well.
How do you feel about this large development in Kensington. Do you welcome the new residents or do you wish this lot would be developed differently? Let us know.
UPDATE 9/21/19 – This project will include a pool, fitness center, and sauna. There will be a drive aisle to access underground parking on Hagert St. New renderings are provided below.
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