A glass half full
Job losses are weighing heavily on the apartment sector, driving down occupancies and rents in every market in the country. But, when compared with some of the nation's hardest hit cities, Philadelphia and its surrounding suburbs aren't doing so badly, said Michael Scully, co-managing director of locally based Scully Company, a third generation multifamily investor and fee-manager with a total portfolio of 8,000 apartment units in Pennsylvania, Connecticut, New Jersey and Florida.
He is confident that the 72-unit DeKalb Apartments his firm delivered in Philadelphia's northwest suburbs in November is small enough to be stabilized or fully occupied by the end of the historically busy summer leasing season in 2010. The community that consists of one- two- and three-bedroom units in two four-story elevator buildings, located within a ten-minute drive of three other company-owned apartment assets, is the final phase of an existing 417-unit community that Scully has owned for 15 years.
With auto industry job cuts and staff reductions in the professional and business services sectors accounting for 40 percent of Philadelphia's 8.9 percent jobless rate as of October, the City of Brotherly Love still beat out the national unemployment rate of 10.4 percent. The region's manufacturing sector actually is picking up, according to firms polled for the November issue of Business Outlook Survey, a newsletter published by the Federal Reserve Bank of Philadelphia. A strong higher-education presence within the metro also continues to drive job growth in the education and health services sectors.
More positive news: The Philadelphia market is not considered overbuilt, "particularly when you look at the Phoenixes, the Vegas' and the Atlantas," said
