House Apartment

The early 20th century was an era of new prosperity for Philadelphia. Businesses flourished, the downtown district became the center of attention and mass transit made the city more accessible than ever. The popular new automobile was becoming an affordable luxury and people flocked to the auto dealerships located along Broad Street to see the new models.

The dealerships were lavish temples, and the showroom of the Packard Motor Car Company, built in 1910 at 317 N. Broad Street, was a prime example. Packard commissioned acclaimed mid-western architect, Albert Kahn, to create a building that would be unrivaled in Philadelphia. From the limestone and terracotta trim on the exterior to the majestic two-story lobby inside, the Packard was designed to be the model of excellence.

In 1985, prominent urban restorers, Historic Landmarks For Living, acquired the property and spent millions to transform it into a distinctive high-rise of 151 luxury apartments. Great care was taken to preserve the significant architectural features of the past and blend them with modern amenities. Step inside the award-winning, restored grand lobby and you’ll see the exquisite details still in place, complemented with contemporary furnishings and a full-size neon sculpture of a vintage Packard Motorcar. The dramatic design continues on every level, where curved hallways lead to creatively designed apartments featuring airy window walls, spacious floor plans and almost every amenity imaginable.

The name that once symbolized uncompromising style, class and comfort now endures as a landmark for luxury living. It’s no wonder the Packard Motorcar Building is one of the most preferred residences in town!

Get more information by calling our Philadelphia Apartment Rental Leasing Office:
Telephone: 215.351.0930

For the past year, apartment buildings have been one of the few bright spots in the real-estate industry as people forced out of the home-buying market by foreclosures or the credit crunch have turned to renting.

But now the specter of job losses is beginning to spread the gloom into that sector as well. As would-be renters are doubling up in apartments or moving in with friends and families, rents and occupancy rates are beginning to fall in many cities. Some cities, however, have not been affected nearly as much. For instance, the rental markets for Philadelphia apartments and Minneapolis apartments remain strong.

"In many markets, our new prospects are beginning to resist the current and increasing levels of market rents we've enjoyed over the past quarter," David Neithercut, chief executive of Equity Residential, told investors during this month's earnings call. While the Chicago-based apartment owner, one of the largest in the U.S., reported an increase in funds from operations of 1.5% last quarter, it lowered its estimates for comparable-property revenue growth.

'Shadow Market' Competition

Investors have been buoyed by the thousands of Philadelphia apartment rentals that have entered the market in the past year, including buyers locked out of the for-sale housing market and those who defaulted on their mortgages. The one downside of the housing crisis for apartment owners has been the "shadow market," made up of unsold homes that owners have put on the rental market.

But that competition isn't nearly as big a problem as job-loss trends. "A lot of folks think it's the shadow market that's softening rents. It's really a jobs issue," says Richard Campo, chief executive of Camden Property Trust. The Houston-based REIT saw rents fall 1.4% last quarter from a year earlier in Phoenix. Arizona shed some 87,000 jobs in June and July. Meanwhile, rents are up in cities such as Houston, where job growth remains strong and where Camden saw 4% rent growth last quarter. Nationally, the apartment owner expects to see rental growth of 2.5% this year, compared with 4.1% growth in 2007 and 7.4% in 2006.

The biggest impact from job losses could be seen in cities such as Charlotte, N.C., and Atlanta, which haven't seen large shadow markets develop. "That group in the middle is starting to show signs of slowing," says Haendel St. Juste, an analyst at Green Street Advisors Inc. "When you look at the markets that are starting to slow, it's spreading beyond the markets that were burdened by housing."

That led to disappointing second-quarter results at Mid-America Apartment Communities Inc., a Memphis, Tenn., REIT with 42,000 rental units. The company reduced its 2008 revenue forecast by 1% and saw year-over-year revenue growth for the second quarter fall to 2.6% from 3.8% last year. The results surprised some investors because Mid-America has long been considered to have one of the least-volatile portfolios. Analysts blamed the declines, in part, on a weakening economy across the Southeast.

Atlanta-based Post Properties Inc., meanwhile, announced that it canceled its planned 300-unit apartment building in Charlotte and delayed three Florida projects.

Cap-Rate Problems

For investors, concerns about falling rents and rising vacancy has resulted in a decline in prices for apartment buildings. The "capitalization rate," which measures the relationship between the price and cash flow of properties, dropped one-quarter of one percent from the second quarter of 2007 to second quarter of this year, according to Real Capital Analytics Inc., a real-estate research firm. The cap rates are now at levels last seen at the end of 2004, the firm says.

The decline in prices has led to a pickup in sales activity. Real Capital Analytics reported last month that sales in June were "well above" recent months' figures, with $5.5 billion already having closed or in contract in the third quarter compared with $8.7 billion in sales in the second quarter.

Apartment-building sales already were far outpacing deals involving other commercial property, such as office buildings and strip malls. The availability of credit from government-sponsored Fannie Mae and Freddie Mac has buoyed values and fueled new deals. Turbulence at the mortgage titans, which together with Ginnie Mae hold 35% of the mortgage debt on multifamily housing, riled apartment owners last month as investors worried about the fate of Fannie and Freddie. But those worries dissipated as the housing bill signed into law last month made the government's implied guarantee of Fannie and Freddie's $5.2 trillion in mortgage securities more explicit.

"There is seemingly no limitation to how much production we can sell to them," says Peter Donovan, who heads up CB Richard Ellis's multihousing group. "I think the market is maybe a little surprised by that."

Indeed, Fannie Mae announced last month that it would increase its commitment to buy loans on multifamily housing of up to $5 million to provide additional liquidity for rental housing. Fannie said it invested $20 billion in multifamily housing in the first half of the year. While that is down 25% from $27 billion in the first half of 2007, the number of total deals has fallen by 45%. Multifamily also remains a safe investment so far this year: Delinquencies on Fannie- and Freddie-backed multifamily loans in the first quarter were just .09% and .04%, respectively.

By: Nick Timiraos
Wall Street Journal; August 20, 2008

Donald F. Smith is joining a regional economic development corporation as president, but that doesn't mean he'll disconnect completely from the two universities where he's been director of economic development since 2002.

Smith is leaving the joint post he held for the University of Pittsburgh and Carnegie Mellon University to become president of the Regional Industrial Development Corp. of Southwestern Pennsylvania sometime in January.

Still, Smith likely will continue to deal with Pitt, CMU and other schools that foster development of spinoff companies.

The RIDC historically has played a key role in development of some of the commercial buildings that served the needs of the universities themselves as well as firms developed by students and faculty, and outside companies looking to move close to the schools.

For example, the corporation partnered with CMU on buildings including the Software Engineering Institute in Oakland and the Collaborative Innovation Center on the school's campus.

Smith played a role in development of the innovation center, the only building in the world with Intel, Apple and Google employees under one roof.

"I believe that the RIDC can still be a resource for the universities," Smith said.

With the universities attracting more than $1 billion a year in research dollars and helping to spawn spinoff companies, officials have estimated that more than 1 million square feet will be needed to house such firms over the next 10 years.

That's one of the reasons why the city's Urban Redevelopment Authority announced plans to develop up to nine buildings at the Pittsburgh Technology Center in South Oakland.

The RIDC has considered building an addition to its 2000 Technology Drive building at the Pittsburgh Technology Center, where Cleveland developer Ferchill Group's $46 million Bridgeside Point II is under construction.

And the RIDC is general partner in Almono LP, a nonprofit partnership of four local foundations that teamed in 2002 to buy the 178-acre former LTV Steel site in Hazelwood. A $400 million development that could create 2,400 jobs and include housing, commercial space, community amenities and green space is planned there.

One of Smith's tasks will be to help choose a master developer for that property, which could be a location for companies looking to move close to the Oakland universities.

The Pittsburgh Zoning Board of Adjustment on Thursday will review plans to put nine parking spaces on a lot at 44th and Calvin streets in Lawrenceville for The University of Pittsburgh Medical Center's Children's Hospital. The board will review Atallah Khali's request to put 10 parking stalls at the rear of a three-story, 12-unit apartment at 343 McKee Place, Oakland. Brandy Mangham will seek approval for a child care center for up to 12 children at 52 Grape St., 30th Ward. Pennsylvania American Water wants to use 640 square feet in a one-story building at 317 Knox Ave., Knoxville, for chemical storage abutting its existing pump station.

Construction activity for the year in Pittsburgh reached $891 million through October; 201 permits valued at $102 million were issued, the Bureau of Building Inspection said. The largest permit was $30 million for a six-story parking garage at Bakery Square, 6425 Penn Ave., East Liberty. Although permits for only four single-family houses were issued, they brought the totals for the year to 157, compared to 67 for all of 2007.

The Green Building Alliance and its executive director, Rebecca Flora, will review the latest local and national green building initiatives at the alliance's annual meeting at 7:30 p.m. Wednesday at the Regional Enterprise Tower, 425 Sixth Ave., Downtown.

A Rite Aid pharmacy has opened at 7345 Saltsburg Road, Penn Hills. It has more than 11,000 square feet. The company plans to open about 85 stores nationwide this fiscal year.

A sales center has opened for the 28-unit Residences condominiums at Three PNC Plaza, Downtown. Howard Hanna Real Estate Services operates the center and said three of the units have been sold.

Daniel Friedson, along with artists, law students and volunteers, has opened an arts and entertainment incubator in the former PNC Bank office at 6000 Penn Ave., East Liberty. Friedson, who runs the Community Economic Development Clinic at the University of Pittsburgh School of Law, said most activities are offered on Saturdays. The incubator offers low-cost facilities and space for performing artists.

Urban Homesteaders in Allegheny County will receive a $94,710 agriculture planning grant from Commonwealth Financing Authority for the Blackberry Meadows Farm Commercial Kitchen/Farmers Market in Fawn Township. The Pittsburgh History and Landmarks Foundation will receive an $83,000 agriculture planning grant for the Farmers' Markets in Washington and Westmoreland counties.

One of Bernardo Katz's former properties in Beechview has been sold. S&T Bank foreclosed on, then acquired, in June 1550-54 Beechview Ave. Clement M. Okoye purchased it for $180,000, according to a deed filed in Allegheny County. The property includes a one-story bank building, three-story mercantile apartment building and one-story mercantile building.

A community shopping center at 560 Route 51, Pleasant Hills, has been sold to Progress CL LLC, in care of Superior Realty Group of Brooklyn, N.Y., for $3.75 million, according a deed filed in Allegheny County. Robert I. Glimcher of Glimcher Venture Holdings Inc. was the seller; Goldy Rabinowitz signed for Progress, part of Highfield Two Associates LLC.