Why Haven't any Philadelphia Developers become Billionaires?
I was doing some research on the wealthiest real estate developers and investors, and it seems as though there are individuals who have made a fortune in almost every other major city than Philadelphia. Even Penn alums like Trump and Moelis haven't really done a lot of business there. What do they know about Philly that I don't know?
Have you ever been? It sucks
lol... is it really that bad? honestly, i don't see how it could possibly be worse than any other major metropolitan area like NYC
Thank you. It's about time someone other than me jumps on the philly hatred bandwagon around here.
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The real estate prices in philly aren't inflated like they are elsewher. IMO, outside of NYC or maybe LA, it is tough to hit that billion mark.
The city is in the middle of a major building spree though. Very impressive.
Philly is an insider game. The numbers generally haven't penciled for outsiders, you need to be politically connected for zoning variances and to get the unions to cut you deals.
Btw ira lubert is a local philly RE billionaire.
Good call. Yeah, there are some big RE funds here also. And the big money is out on the mainline.
According to celebrity net worth, Ira Lubert has a net worth of $45 million dollars... Not to mention that if he was in fact a billionaire, Forbes would most likely have articles about him, no? I've never heard of this guy, and that still doesn't really explain why there aren't many (if any) major real estate tycoons actively pursuing projects there, including the ones that have connections in Philly. Is it just not as landlord/developer-friendly area as Miami or NYC from a political standpoint? Is there not enough demand for inflated prices? I just don't get it. What are the primary industries in the area?
The old saying is 'new york construction costs, baltimore rents.'
Philadelphia is the 5th largest city (population-wise) in the U.S., yet it was listed as #84 on Forbes list of "best cities for businesses and careers". 84!!!
I really don't understand this entire conversation. Who cares what Forbes says? I'd suggest you come to center city and see the development that is going on vs. whatever a magazine reports. Philly was largely underdeveloped for years. This has started to change in the last 10-15 years. There are currently a number of large developments going on (50 store FMC building, 60 store Comcast II building, One Riverside, 500 Walnut, etc). This obviously pales in comparison to NYC, but when you have two major commercial buildings going up and probably a dozen 30 store apartment buildings being built at the same time, in a city this size, it is impressive.
http://forum.skyscraperpage.com/tags.php?tag=philadelphia
This lists all the currently being developed RE projects in Center City.
Thanks for the info, this is helpful. Just curious, do you know why it wasn't developed for a long time?
Philly is a hidden gem that nobody cares about.
came here to post lubert adler & Equus RE.
I have a special affinity for Philly having grown up there and spent time there as an adult . It's actually a cool town and it's gotten a lot better over the past 20 years. I also know more than a few NY'ers who went to school there that would have loved to stay or go back and raise a family after NYC because it's affordable but there just aren't many opps there in finance. Some, sure, but not a ton.
Real estate wise there are a lot of more local players and some REITs like Brandywine and PREIT that do a lot in the area and a limited amount of PE. One of the sayings in Philly real estate is that it's NYC costs and Baltimore rents. Because it's a union town construction is really expensive, close to NYC prices and there's a limited amount of prime land to build class A stuff but you just don't get the rents that you get in NYC (or SF, Boston, etc). It's a better play for the REITs and local players that understand the market and/or have a lower cost of capital than an outside PE or individual is going to get. It's a secondary investment city so it doesn't draw the same interest as Boston or SF and real estate development is known as a full contact sport because you need to know the politicians and unions to get anything done.
Philly itself is also a shitty city to do business in between wage taxes and the unions controlling all construction in class A office. I opened an office there a few years back, and I've opened offices in multiple cities, and the cost and time it took to build out the space was fucking outrageous compared to anywhere I've done that outside of NYC. It also really fucked itself over with the "gentlemen's agreement" to not build taller than Billy Penn before Bill Rouse built 1 Liberty in the early 90's so there was very little new construction from the time that Ed Bacon did the buildings in Market St West in the 60's and early 70's so most new construction, and jobs, went to the burbs or migrated north to NYC.
It's also a very "ed's and med's" area. There's a lot of pharma and colleges in the area. Colleges almost always own their RE and a lot of the big pharma there does as well because they're r&d and manufacturing specialty facilities that they'll just own and stay in forever. For example, Merck has a massive campus in Montgomery County that has its own zip code and they own the entire thing.
While there's some general finance, it's definitely limited because of its close proximity to NYC. When you're only an hour away from the American Capital of finance why not just be in NYC where all of the talent and other firms are. It's often overlooked because it's sandwiched between NYC and DC.
The wealth is also a lot lower key there. I personally know a few billionaires in the area who are not on the Forbes 400 list because they don't want people to know about them and they didn't make their money in RE or finance but sold operating businesses in more boring sectors.
Philly has a very tight knit finance scene. Like you live or die in your network. Lot of stuff in the surrounding area. If philly would just fix it's tax code and continue walking down the wage tax the place would explode. I don't think you'll see many banks relocate there, but I can deff see PE growing here. I've seen a lot of smaller fund shops open up because you have Penn right in your back yard.
The construction scene is really nuts right now. FMC HQ building is the trio for brandywine. You have comcast 2 really being a game changer. Market East is a block long development and the Gallaries being improved will be great for the area. Lot of stuff going on around the water front as well.
If the economy stays strong I see the city really coming into it's own in the next 5 years. If high speed rail ever happens, wow, a total boon.
I'm a little worries with Nutter leaving. Last thing the city needs is a bleeding heart liberal. City keeps improving despite the leadership running the place.
Tourism is good. You have independence area with the bell and where the constitution was signed. Real pretty. They are currently building a museum of the revolutionary war which is supposed to be awesome.
The PHL Art museum is great. I go regularly. The Barnes is stunning. Those two combine to have one of the best collections of impressionist painters.
The city is currently constructing two major hotels (SLS and Westin/W) fight in CC. With the convention center finally kicking out the carpenters union they have been seeing an uptick in bookings.
City still gets a bad rap, but with the Pope coming, DNC and Made in America being Philly only I think you'll see more and more tourism.
I don't know much about Philly RE but now, let's say you and I go toe-to-toe on bird law and see who comes out the victor?
Funny thing is that new york actually sucks
agreed, NY is miserable
Philadelphia and the suburban outskirts are all amazing. There's also a lot more than just city life in the area.
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