There has been an increasing number of “concession surfers” — renters looking to repeatedly cash in on incentives doled out by landlords, especially in hypercompetitive environments like Northern Liberties and nearby neighborhoods on the Delaware River, where thousands of new apartments have recently come online. The surge in multifamily construction means Philadelphia developers and landlords are reckoning with a rental glut for the first time in decades. Rent increases have slowed and, at the high end of the market, reversed as concessions mask the fact that tenants are harder to attract at asking prices. According to data from commercial real estate analytics firm CoStar Analytics, the citywide vacancy rate passed 10% this year — up from 5.7% in 2021 and over 2 percentage points higher than the current national average. That’s led many building owners to offer renters multiple months of free rent or other amenities to compensate. Although thousands more units are under construction, new building permits plummeted last year after interest rates spiked. And Philadelphia has continued to see thousands of new tenants move in every year: Out of 9,600 units built since 2021, 8,600 have already been occupied. Read more in the Inquirer.
Source: Philadelphia Inquirer; 8/6/2024