In recent years, Philadelphia has seen extensive development and redevelopment plans that have attracted investors and potential residents to the area. Philadelphia's real estate market is one of the largest in the country; even after the pandemic, the market continues to grow.

Pennsylvania's largest metropolitan area is known for its rich historical and cultural background and is the fifth most populous city in the country. But Is Philadelphia a satisfactory market for investment? How profitable is the Philadelphia real estate market, especially in the commercial sector? Let's find out together.

Why Is Philadelphia A Travel & Investment Destination?

There are numerous reasons why investors like to invest in the city. The main attraction for investors in new construction commercial properties in Philadelphia is its location and strong economy: healthcare, education, and technology industries such as banking and insurance have made a strong economy possible. Philadelphia is strategically located between New York City and Washington D.C., making it an excellent location for business opportunities. With approximately 1.6 million residents in Philadelphia and 6.5 million in the Greater Philadelphia area, the region has a diverse economy, and the city is a stable and sustainable environment for investors.

Philadelphia is a well-known center for education. There are more than 101 colleges and universities in the region, attended by more than 400,000 students. This gives Philadelphia the second-largest number of universities in the United States. The University of Pennsylvania (Wharton) is the nation's leading business school. Philadelphia is the #1 affordable travel destination in the U.S. Not only is it one of the best cities to walk in but it is also ranked as one of the best U.S. cities for a romantic honeymoon by both Travel Magazine and Leisure Magazine.

Now let's get down to business and find out why investing in commercial real estate in Philadelphia is a good decision.

Why Invest In Commercial Properties?

Compared to residential properties, commercial real estate offers a higher level of income. Due to longer leases in commercial real estate, you can comfortably expect a steady and consistent income.

The commercial real estate industry has grown by 37% from 2020 to 2021. Growth was steady from 2011 to 2019, then declined in 2020 due to the pandemic, and then grew again. It is difficult to calculate the exact ROI for commercial real estate investment. However, the average return for commercial real estate is 9.5%. The market is the fifth-largest industry in the U.S.

Commercial properties have more reliable occupants who keep the property in good condition and usually have better relationships with the landlord. Commercial real estate is diverse and does not limit investors to geographic or demographic areas. Investment opportunities range from retail and hospitality properties to industrial properties that can add value to any investor's portfolio.

Why Is the Market For New Construction Commercial Properties In Philadelphia Profitable?

Now we come to the million dollar question. The answer includes:

1.Opportunities in Real Estate investment in Philadelphia

Rents for office and commercial space in Philadelphia are lower compared to the nearest metropolitan areas. However, residential construction is booming, and large residential and commercial investors are sharing the market in the region. According to the U.S. Bureau of Labor Statistics, construction is one of the industries recovering fastest after the pandemic. This makes the region a historic opportunity for investors, as demand for real estate now exceeds construction activity. The Philadelphia metropolitan region, which covers an area of more than 400 km, offers lucrative opportunities for both construction and investing, the perfect mix.

2. Booming Economy & Diverse Employers

In 2021, 13 of the Fortune 500 companies located in the greater Philadelphia area improved their performance rankings. For commercial investors, this means that these established companies generate immense revenue and are the destination for people seeking jobs and business partnerships. Consequently, they need new real estate that includes both residential and commercial properties.

As the number of potential buyers increases, so does the demand for real estate; and a smart investor knows how to capitalize on that demand. It is a fact that people always seek change, and the demand for new construction commercial properties in Philadelphia must be met by new business people who see the bright future sooner.

3. Transportation & Infrastructure

Logistics are critical to any construction project. The better the transportation options, the easier it is to get raw materials, labor, or goods into the area. In Philadelphia, you have access to major consumer markets within a 2-hour flight radius. Needless to say, Philadelphia has a solid transportation infrastructure.

A globally connected airport, a network of highways, a dense regional rail network, and access to numerous major ports. This helps lower construction costs for projects. As a commercial real estate investor, what more could you ask for to invest in a desirable region? Considering all these factors, you can travel comfortably and get around effectively in Philadelphia.

4. Incentives And Financing

If you are an investing business in Philadelphia, you can benefit from funding and incentive programs. These include plans at the state and county level. As an investor in new construction commercial properties in Philadelphia, you can take advantage of tax credits, low-interest financing, grants for job training, and project costs. The result? You'll have no trouble moving forward and expanding your business with a variety of tax credit applications, financing, and loan options available to you.

5. Innovation And Entrepreneurship

It's not called the No. 1 emerging startup ecosystem in the U.S. for nothing. The investment landscape in Philadelphia is growing rapidly. In 2021, approximately $8 billion in venture capital investments were raised. These deals help innovative and entrepreneurial startups grow, and as they grow, so does the need for workers. This is a unique opportunity for any investor in the real estate sector to capitalize on the expanding market demand in the region.

6. Life Quality Necessities

The thriving demand for living in a historic and industrial region of the country leads to culinary and cultural offerings that make Philadelphia one of the best destinations for food and culture not only in the U.S., but in the world. The quality of life for residents also includes outdoor recreational opportunities such as gardens, parks, restaurants, and sports facilities.

Putting these elements in perspective, it's easy to see the demand for new construction commercial properties in Philadelphia. This is a dreamland of sorts for any savvy commercial investor looking to take advantage of such an exclusive environment.

Bottom Line

Investing in new construction commercial properties in Philadelphia offers many advantages. The opportunities are endless. If you want to learn more about the rules and regulations before making the right decision, our team of professionals is here to help you make the best choice. Contact Jim anytime to get the latest information.

Call Jim Onesti Today

Whether you’re looking to invest in commercial real estate or searching for luxury homes for sale in Philadelphia, Jim Onesti is your real estate expert. Jim Onesti has been one of the most successful real estate sales professionals in Philadelphia; focusing largely on luxury homes and large-scale commercial real estate and high-end developments. For further information, contact Jim today to schedule your appointment.

The Benefits of Investing in New Construction Commercial Properties in Philadelphia