Writer: Esteban Pages
Regional Review is a year-end series from Capital Analytics that looks at key developments throughout the year and sets the stage for what’s to come in the near future.
3 min read December 2023 — Despite higher interest rates and population loss, Philadelphia is closing 2023 on a positive note as Southeast Pennsylvania continues making strides in its green economy and life sciences industry and the city welcomed its first-ever female mayor.
Although the banking failures earlier this year alarmed the region’s banking and finance landscape, Greater Philadelphia’s financial ecosystem has proven its strong fundamentals. “The economic pendulum does not swing too widely in Philadelphia. We have a diverse economic base but pharmaceutical companies and educational institutions are what stand out in this region. Even if we have a pronounced recession, I do not think we would take a hard hit and am not concerned about significant job losses. We have great infrastructure and a lot of things to offer as well as solid financial institutions that are ready to help stimulate growth,” said Vincent Market, EVP and CFO of TruMark Financial Credit Union, in an interview with Invest:.
Hydrogen and electric vehicles (EVs) are shaping up to become critical elements for the future of Philadelphia’s green economy going forward. Statewide, Pennsylvania is developing a pipeline of 54 projects spread across 35 counties and totalling $33.8 million in investment. Provided by the National Electric Vehicle Infrastructure (NEVI) program, these federal funds will bolster the electric vehicle charging infrastructure available across the state. On the hydrogen front, Southeastern Pennsylvania will have a key role to play in the federal government’s ambitions to develop 17 sites as hydrogen hubs throughout the Mid-Atlantic region. For the Keystone State alone, these hubs will create 20,800 new jobs and rake in up to $10.2 billion in public investments to develop close to 300 hydrogen-specific projects.
Philadelphia’s real estate market remains challenged by the difficult macro environment characterized by 16 months of uninterrupted interest rate hikes and inflation-driven higher construction costs. Debt capital and stringent lending standards are also complicating the development pipeline. Two particular projects have been impacted by this environment: Alterra Property Group’s 352-unit modular apartment building in University City and Goldenberg Group’s 468-unit tower in Broad and Lombard Streets.
Despite the challenging landscape, Philadelphia’s life sciences industry continues thriving. It can boast $4 billion worth of investments in projects providing 11 million square feet of industry-related space. Not only that, CBRE’s 2023 Life Sciences Research Talent report ranked Philly 6th nationwide. The industry is slated to be an economic driver going forward, especially after the announcement of MRA Group’s $1 billion redevelopment. The real estate solutions firm is one step closer to developing its Chestnut Run Innovation & Science Park, extending over 780,000 square feet. By securing $63 million via combined loans from Fulton Bank, Nuveen Green Capital and WSFS Bank, MRA Group will be able to develop a 102,000-square-foot building for Solenis, a specialty chemicals manufacturer.
In early November, Philadelphia made history by electing its first female mayor. Cherelle Parker will officially take office on Jan. 2, 2024 as the city’s 100th mayor, after a campaign focused heavily on public safety and economic opportunity. Looking ahead to 2024, the administration and the Philadelphia business community will look to address ongoing challenges and create new opportunities for residents and businesses.
