Economy doesn't halt construction

Shaky economic times and a tumultuous housing market have not prevented new properties from springing up throughout University City in recent years.

Since 2006, a number of mixed-use, luxury apartment complexes have come to call West Philadelphia home. With more construction on the way, it may seem like the area isn't feeling the pinch of the global financial crisis.

Experts cite demand for education, faith in the Nutter administration and the desirability of the area as reasons for continued development in University City.

Hub I, located on 40th and Chestnut streets, was completed in 2006 for $23 million. In 2007, the $71-million Domus complex, located on 34th and Chestnut streets, was up and running. And the Radian on 39th and Walnut streets was finished this past August for $50 million.

Over the next year, construction on Hubs II and III will begin on Chestnut Street near the original Hub. Costs for Hub III are projected at about $19 million, while costs for Hub II have not yet been released.

Wharton Real Estate professor Albert Saiz attributed much of the construction in the area to positive trends the city has experienced over the last 10 years.

"At the national level, with the general rise in incomes, there is increasing demand for living in high-amenity, dense areas," Saiz wrote in an e-mail.

He said young people and empty nesters are the most likely candidates to pursue living in the area.

"Central cities with cultural, historic, and recreational amenities, such as Philadelphia, are faring well demographically and economically all over the USA," he wrote.

Saiz added that renewed optimism about Mayor Michael Nutter's administration has drawn many in the business and civic community to the area, making for a greater demand in housing.

"University City is a desirable place to live and work, and the stability of the market is indicative of the stable demand fundamentals," said Paul Sehnert, Penn's director of real-estate development.

Still, Sehnert said he did not consider the area immune to the problems that have recently plagued the national housing market.

He cited the cancelation or postponement of several high-profile projects in Center City - such as Donald Trump's planned 45-story Trump Tower - as evidence that Philadelphia has been affected by national housing problems.

But Saiz said he saw education as a major reason for the large investment in the area to build luxury complexes, despite the economy.

"Demand for college and Masters education is very strong and growing," he wrote. "In fact, enrollments in some master's programs is countercyclical: When the economy is not very good, people go back to grad school."

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