The ULI Annual Real Estate Forecast 2023, included a panel on “What’s Driving New Investment in the Region.” The panel was moderated by Claire Marrazzo Greenwood, SVP, Economic Competitiveness, Chamber of Commerce for Greater Philadelphia & Executive Director, CEO Council for Growth. Panelists included Kevin C. Gillen, P.h.D, Senior Research Fellow & Adjunct Professor of Economics, Lindy Institute for Urban Innovation, Drexel University; Gina Lavery, Senior Vice President, Econsult Solutions, Inc.; and Travis McCready, Head of Life Sciences, Industries Americas, JLL. They shared their thoughts on local trends, opportunities, and challenges facing investment in our region.
McCready kicked off the panel by sharing his optimism for a growing ecosystem. One factor contributing to this ecosystem is the fact that research institutions are taking a more active role in building commercial life sciences developments and investing in mixed-use environments that are deeply textured, providing a place of support and collaboration between different technologies. We are now competing to create attractive environments to talent from all over the country. The competition is no longer regional–we must continue working on improving quality of life to measure up. While life sciences have slowed down slightly, venture capital funds are growing and still being created which is a promising factor for this sector.
Gillen commented on the impacts of remote working and the structural shift that it has caused. Housing prices have seen a decline due to the rising interest rates. This has resulted in a turn of the market with a major shift yet to come. We have seen more interest in city living again with some newcomers from New York. We’re continuing to see greater flexibility in lifestyle with people coming back to the office part-time. Things seem to be balancing out.
Lavery contributed the fact that Philly is affordable compared to a lot of places. We compete well with New York City, Boston, and Washington DC. We have world-class amenities, institutions, parks, and trails. We need to continue to invest in our infrastructure and transportation to continue competing for people and talent.
McCready highlighted a few additional strengths that have helped Philadelphia differentiate itself. The first is that Philadelphia is a big city that feels like a small town. We have good density that is attractive to life sciences which thrives on density and clustering. We’ve also started to repurpose industrial projects for an innovation economy–something that we haven’t seen anywhere else in the country right now. Lastly, Philadelphia is 1 of 3 leading ecosystems in selling geno-therapy, a part of life sciences that’s growing 7 times faster than the rest. All of these things have contributed to our success.
Some challenges Philadelphia needs to address to sustain growth is to create affordable housing in close proximity to work. To be able to attract the top scientists to our region, we need to improve transportation and our public schools. Our tax burden is too high for startups and there’s a high barrier to entry in our city. The people who run Philadelphia are born and raised here. We need to be more welcoming to outsiders and the city government needs to have innovation on their agenda to align with the efforts already taking place.
We have amazing assets in Philadelphia. We have history, architectural legacy, and people with a level of passion that cannot be manufactured. We can achieve our aspirations by highlighting these strengths and being intentional on where we focus our efforts so that we could better compete not only nationally but also globally in the years to come.
See below for links to additional recaps from the Annual Real Estate Forecast 2023: