As commercial development in the Philadelphia suburbs continues to center around mixed-use communities that can approximate urban walkability and transit access, sprawling office parks seem like a relic from a previous era — but that could soon change.
With more value being placed on transit access and walkability, location is more important than ever for suburban development, but precious few parcels of land remain available to develop in areas that make sense. Many older corporate campuses occupy well-positioned land, and developers and municipalities alike are looking for ways to leverage them.
“We have a future land-use map, and we need to talk about how our business parks need to be dynamic places with retail, and a good portion of new multifamily projects have been proposed in office parks,” Montgomery County Planning Commission Executive Director Jody Holton said at Bisnow’s Strength of the Philly Suburbs event last week.
The MCPC has rezoned business parks in Fort Washington, Lower Merion and Upper Dublin to allow for them to diversify and create walkable areas like the King of Prussia Town Center, which sits at the center of multifamily developments and medical office buildings near the King of Prussia Mall and has created buzz across the real estate community.
Whereas the town center and mall are big enough draws on their own in the current climate, King of Prussia has business parks farther out that have seen interest wane, and the King of Prussia rail extension will include two stops at such parks to increase access. In addition, the MCPC is working on additional exits from Interstate 76 to feed more directly to those parks. By beefing up the infrastructure, Holton hopes to inspire developers to reinvest and reinvigorate such parks.
Such redevelopments have already proved successful, with projects like Ambler Yards, the conversion of the Dow campus into Spring House Innovation Park and Corporate Office Properties Trust’s redevelopment of the Unisys campus in Blue Bell into Arborcrest. In the absence of major new development, and with rents rising all over the Philly suburbs, these parks are already garnering serious interest again.
“I think everyone’s starting to price a little bit of inflation into their rents, and what we’re seeing is that tenants are being cost-conscious, as always,” Henderson Group President and CEO Brian Coyle said. “So when they might have favored ground-up development, they might now be looking at retrofits, and a business that once considered Class-A offices now considers Class-B.”
These successes are driving multifamily development interest, even as that sector’s cycle looks to be nearing the end. Developers know that office tenants are looking for any edge in their space to attract talent, and accessibility can be considered an amenity just like a café or fitness center.
“We’re starting to see older millennials moving out to the suburbs to be close to their places of employment, because those reverse commuters are sick of heading out to the suburbs every day,” Bozzuto Development Manager Pete Sikora said. “Putting multifamily in an office environment to create walkability will be successful, and if we increase walkability, we improve traffic.”
Read more at: https://www.bisnow.com/philadelphia/news/mixed-use/suburban-office-parks-mixed-use-multifamily-85158?be=wpfritz%40me.com&utm_source=Newsletter&utm_medium=email&utm_campaign=mon-19-feb-2018-000000-0500_philadelphia-re?utm_source=CopyShare&utm_medium=Browser