It has been six months since the COVID-19 pandemic has upset the United States economy, leaving no industry unscathed – including commercial real estate. Initially, developers and contractors suffered a huge financial impact from Pennsylvania’s strict pandemic closures, as all nonemergency construction was required to halt on March 19 to mitigate the spread of the virus. The construction industry was able to resume work six weeks later, on May 1; however, there have been some definite shifts in commercial real estate since that time.
PHILADELPHIA INVESTMENT PROPERTIES
Prior to COVID-19, investors were very attracted to multifamily investment properties. After new rent control laws were passed in New York City, the wave of buyers interested in Philadelphia investment properties increased particularly in multi-family and mixed-use investment properties.
Since COVID-19, Class A multi-family listings have retained strong interest and remained a good buy. These properties are most likely to house tenants that can make their rent payments on time. Rates of rent payment in this sector have remained steady since March. Class B and C properties are actually experiencing low vacancies as well us small upticks in rent in Philadelphia.
In all categories, landlords continue to see high renewal rates, as many tenants are choosing to stay in their current rentals rather than move right now.
While it is hard to know what the future of the office building looks like, as many employees continue to work from home, there are commercial buildings for sale that are seeing more demand now than ever before. As online shopping continues to thrive due to the impacts of the pandemic, warehouse spaces have been a great buy, according to research firm Propmodo. Companies are looking for warehouse space just outside of major population centers that allow them to serve their clients with increasing speed. This includes grocery stores, who are finding that online grocery delivery continues to thrive as the pandemic wears on and need additional space to maintain efficient delivery.
WHAT DOES THE FUTURE HOLD FOR PHILADELPHIA INVESTMENT PROPERTIES?
As we look to the winter, no doubt things will continue to evolve in both the economy and the commercial real estate industry. If you are looking to enter the market, there are certainly plenty of commercial real estate listings and Philadelphia development properties that remain a strong investment. The dedicated team at MPN can help find the perfect space to align your goals with the ever-changing market, whether it be securing retail, restaurant, or creative office spaces for leasing in Philadelphia or the finding the ideal commercial property for sale.