Most of our stories about student housing in West Philly these days center around new projects springing up in neighborhoods farther and farther flung from the schools that the students are attending. As we’ve seen, new construction has moved way up into Mantua, way down into Southwest Philly, and is starting to move into Mill Creek. And this doesn’t really come as a surprise, since land that’s closer to Penn, Drexel, and University of the Sciences is generally more expensive and/or already developed.
That being said, there are still plenty of parcels near these campuses that aren’t being utilized at their highest and best use, and developers have understandably been pushing forward on taller and denser projects at those sites. On Chestnut Street, for example, Alterra has been quite busy. They built a 130-unit building on the 4100 block of Chestnut Street in place of a car wash, finishing in 2020. They also have a larger project still under construction at 43rd & Chestnut, where a previous owner had unfortunately demoed a beautiful church. Incidentally, the smaller building at 4125 Chestnut sold to out-of-town investors for $36M last year. So not only do these kinds of projects make sense to build, but they also pencil on the institutional investor side of things.
Given the presence of these projects and a few others nearby, we’d expect that developers will continue looking to consolidate underused properties to build these sorts of mid-rise projects, moving forward. And indeed, that’s exactly what’s happening on a property that sits right between the aforementioned buildings we just described. We see a zoning permit at 4141 Chestnut St. which also includes the properties next door to the west and wrapping around to the north on Ludlow Street. Combined, these properties contain about 22K sqft of space and zoning that’s favorable for height and density. That will soon translate into a by-right mixed-use building with 136 apartments, 37 parking spots, and retail on the first floor. We don’t quite know how tall the building will be, but we expect something that’s consistent with the other newer buildings nearby.
While we imagine that these units will primarily target Penn undergrad and grad students, we can also see how the buildings could have crossover appeal to young professionals working in West Philadelphia. Penn, HUP, and CHOP are huge employers and as more apartment buildings spring up that are proximate to those job centers, we believe that we’ll see more non-students living close to campus, especially if those units err on the luxury side. Don’t forget the University City Science Center, which has a bold path for growth in the coming years, as another draw for people to live in this area. Throw in the retail amenities and the green space afforded by the nearby campuses, and it makes even more sense. And it’s a good thing too, because it’s not like admissions at these institutions are shooting up to proportionally meet the increase in housing nearby.