Changing Demographic Pushes Philadelphia’s Retail Development

By Kathleen Nicholson Webber

Originally posted in Women’s Wear Daily on October 7, 2016.

In the past five years, Philadelphia has exploded with retail and residential development, so much so that it’s hard to keep track of the multitude of cranes that fill the Center City sky.

To the chief executive officer of one of the nation’s largest real estate firms, the booming population in Philadelphia can be explained in terms of sidewalk cafés: Cafés filled with young people, he contends, tell the tale of the changes in the City of Brotherly Love.

“In 2001, there were only a handful in the city,” said Joe Coradino, ceo of Pennsylvania Real Estate Investment Trust, or PREIT, which owns seven malls in Greater Philadelphia and 26 worldwide. “Today, there are 370. That’s a proxy for the growth of Millennials and other residents who want to live, work and play here.”

In the past five years, Philadelphia has exploded with retail and residential development, so much so that it’s hard to keep track of the multitude of cranes that fill the Center City sky. By 2018, more than 2.8 million square feet of retail will be added in the city.

Why is Philadelphia more appealing now?

“Most people have a frame of reference in Philadelphia that goes back a decade that includes Rittenhouse Square as the epicenter of wealth in the city,” said Coradino. “Now the wealthiest neighborhood is the Washington Square area. The money has shifted from west to east.”

Thank visionary developer Tony Goldman for that. He came to town at the end of the Nineties and saw potential in Washington Square, taking it from seedy to swanky. The area, called Midtown Village, is where the dollars are. Most recently, adjacent pockets near Washington Square and closer to historic Independence Mall are being snapped up by developers for mixed use. In walking distance from the square, there are seven major developments under way, adding more than 1.9 million square feet of retail and representing a $715 million investment east of Broad Street.

An influx of out-of-town investors are finding Philadelphia’s prices more approachable than New York or Washington, D.C. “The east side property values are lower, so the ROI rate is better now on the east side,” said Catherine Timko, retail consultant with the Riddle company, who helped the team at the Center City District position the city to investors.

According to investment firm CBRE, prime retail rents in Center City are pushing $225 a square foot for corner space. Rents on Walnut Street average $154 for inline space now, as compared to $80 to $100 five years ago for inline space. Chestnut Street is now averaging $60 to $75 a square foot west of Broad Street, as compared to $35 to $40 five years ago.

“The dramatic change in retail rents reflects a change in the quality and character of retailers locating in Center City,” said Paige Jaffe, first vice president at CBRE. “Larger-size retailers such as Target and Mom’s Organic Market are going east of Broad. Ath-leisure tenants like Under Armour, New Balance and Lululemon are paying the high rents of Walnut Street west of Broad.”

The other thing that made Philadelphia attractive was the growing and changing consumer. According to Campusphilly.com, of the 300,000 college students who study in the metropolitan area, 64 percent are now staying after graduation to live and work (companies with offices in the suburbs are looking to open satellite offices in the city to attract the best talent). Empty-nesters are also ditching the suburbs for this culturally rich, walkable city, and residential has had to keep pace. There are 4,100 units under construction in town. All of these factors have created the perfect storm for investors. “Center City skews twice the national average of Millennials. The missing link was retail,” explained Coradino.

Of the people who are now calling the city home, incomes are up. According to a report by CBRE, in the past 15 years there has been a 288 percent increase in households making more than $500,000. The average Center City household income is $111,034. “When we first started going to investors with these numbers, they said, ‘Why haven’t we looked here before?’” said Michelle Shannon, vice president of marketing and communications at the Center City District. “Investors and developers say Philadelphia is a bargain compared to other cities.”

Several national tenants who cater to Millennials are seeing some of the highest sales per square foot in Philadelphia out of their portfolio.

In 2014, Coradino, PREIT and California-based Macerich invested $325 million in the redevelopment of the Gallery mall, which dates back to 1977 and will be renamed the Fashion Outlets of Philadelphia (Market Street between Eighth and 11th). Its first anchor tenant, Century 21, has taken over in the former Strawbridge’s flagship adjacent to the mall. It was the first out-of-New-York location for the retailer. FOP will feature 125 retailers, including additional flagships, outlets, artisanal dining and entertainment, and will open in spring 2018. The new design opens up the old inward-facing Gallery to the outside. There will be more street-level entrances and lots of cafés. “We are thinking about the visitor walking from Independence Mall to the Convention Center. We want it to be inviting,” said Coradino. Flanking the new development is the Jefferson University train station, where 22 million commuters pass each year, and the Convention Center, which gets 10 million visitors and nearby office workers. Across the street, another development, East Market (11th and 12th streets on Market Street), will feature 325 apartments and retail. “There is $2 billion being invested in the neighborhood. In the next 24 months, it will be transformed to a very hot neighborhood.”

National Real Estate Development will expand the Market East retail district and connect it to the vibrant Midtown Village just south of the project. Dan Killinger worked for Tony Goldman in New York in the Nineties. National bought a rare, 4-acre site across the street from the Gallery in 2013 and has invested $250 million in it. East Market will feature two mixed-use towers, a warehouse space with 130,000 square feet of retail, apartments and 161,000 square feet of office space. One tower will open in the spring and will feature a 15,000-square-foot Design Within Reach flagship. The former warehouse next door will be redeveloped into modern office spaces above ground-floor retail that includes Mom’s Organic. The Marketplace Design Center will relocate to this space. “We were interested in investing here because Philadelphia hadn’t had overbuilding like other cities had,” said Killinger. “If you do it right, you create a place where people want to live and work.”

Also under construction is The Collins (11th and Chestnut streets, The Brickstone Group). Just blocks away, (Sixth and Walnut streets) the Curtis Center, the site of the former Curtis Publishing, is being redeveloped with an investment from Keystone Property Group, Mack-Cali Realty and Roseland into luxury apartments, office space and 50,000 square feet of retail space and will house a P.J. Clarke’s, which will overlook Washington Square.

Not to be left behind, Rittenhouse Square has also seen a revitalization and expansion of retail in the past two years from stores mainly on the square and Walnut Street northward to Chestnut. New independent tenants include Skirt, a designer shop with two other Philadelphia locations; indie boutiques Shop 65, ellelauri and Bela Shehu. “The local boutiques are even more important because it makes us different than a mall and makes us more of a regional destination, too,” said Shannon. Add to that Rag & Bone, Michael Kors, Theory and Under Armour. Veteran designer retailer Joan Shepp moved off Walnut to bigger digs on Chestnut Street.

Just off the square, a new $300 million development, 1911 Walnut, will feature residential and 55,000 square feet of retail. It is being spearheaded by Tennessee-based Southern Land Co. At 19th and Chestnut, Pearl Properties is building another residential tower with ground-floor retail including the city’s third Target.

“Developers aim to draw a young workforce to downtown offices using retail as a strategy,” said Casandra Dominguez, manager of business retention and retail attraction, Central Philadelphia Development Corp. This shopper is attracted to national as well as independent retailers. Just four years ago, before the hum of dump trucks permeated the city, the Philadelphia Fashion Incubator at Macy’s, or PFI, opened its design space at its flagship at 13th and Market. It, too, is looking to open a place in which graduates can share retail and office space. This is the next step for grads to have a space to sell from and do market research. “Michelle Shannon and I have wanted to do this for four years,” said executive director Elissa Bloom. “We always wanted to rebirth this fashion sector in the city. In Philadelphia, access for designers to enter the market is more feasible than other cities.”

Catherine Timko will complete a feasibility study and they hope to open this space next spring.

OUTSIDE OF THE CITY

A short drive from the King of Prussia mall is the new King of Prussia Town Center by JBG Real Estate, the largest commercial real estate firm in Washington, D.C. The outdoor, upscale-lifestyle shopping and dining center, in the middle of the Main Line, features 260,000 square feet of shopping, dining and entertainment. It is intended to be a complementary destination to King of Prussia mall, according to Tom Sebastian, co-ceo of JBG. In the works for five years, it’s next to a 24-hour Wegmans and close to 10 million square feet of office space. “Workers are looking for a place to go. People are eating out more.”

JBG created a main street with 17 buildings that will include a Nordstrom Rack, REI and Ulta. Dining is local (Honeygrow, Davio’s and Cityworks) and from the D.C. area (Founding Farmers). “Many are buying online versus department stores,” he said. “People crave experiences to relax.”

The Town Square is a pavilion with live music, movies in the evenings and a wall of fire that illuminates the square at night. Twenty leases have been signed, but the company hopes to fill the remaining spaces with fashion, accessories and home retailers by next spring.

Antiques Roadshow: Gay Culture May Be Obsessed With Youth, But When It Comes To Decorating, A Touch Of The Old Can Be Just The Thing. Here, Three Great Locales Perfect for a Treasure Hunting Day Trip

By Kathleen Nicholson Webber

Originally posted in the Philadelphia Magazine on March 15, 2013.

ANTIQUES ROW, PHILADELPHIA

Start at Moderne Gallery (111 N. Third St., 215-923-8536), where owner Bob Aibel specializes in 20th-century decorative arts, namely French Art Deco and the American craft studio movement. His French Deco gems include a 1932 rosewood buffet by Marc du Plantier ($60,000), angular and geometric ceramics, silver, boxes and jewelry. “Many first-time buyers walk in and buy a clock or lamp and begin collecting,” says Aibel, also the go-to guy for the renowned work of New Hope furniture maker George Nakashima. You can pick up an end table of the late master woodworker for $2,500 or, if it’s burning a hole in your pocket, plop down $100,000 for a dining table from sculptor Wharton Esherick. (Just make sure you invite me to dinner.)

M. Finkel & Daughter (936 Pine St., 215-627-7797), housed in a circa-1840 building, was opened in 1947 by Morris Finkel as a period furniture shop featuring works from America, England and Europe. Daughter Amy joined in 1975, adding quilts from the late 19th and early 20th centuries and American needlework dating from 1770. Works can run from $2,000 to $100,000. (The other focus here: 19th-century American glass.) A recent find: a walnut partner’s desk, bought in New Hampshire, which was once used by a New England judge ($6,200).

Anastacia Fahnestock and husband Scott Evans’ shop, Anastacia’s Antiques (617 Bainbridge St., 215-928-9111), is housed in a former carpet store from the 1800s located one block south of South Street and chock full of curiosities. Need a stuffed fox, turkey or badger, or maybe a bear rug? (Who doesn’t?) You’ve come to the right place. Papier-mâché masks or a velvet opera coat? They have it. Their furniture dates from the 1870s to 1920s, but they also carry everything from cufflinks to carnival banners. Their early medical holdings—microscopes, apothecary bottles, skeletons—are conversation pieces to enliven the ho-hummiest of nests.

LAMBERTVILLE

A trip to this bucolic river town should start with a morning at Rago Arts and Auction Center (333 N. Main St., 609-397-9374). Fans and collectors have made David Rago and his wife and business partner Suzanne Perrault’s the largest auction house in New Jersey, selling everything from Arts & Crafts furniture to contemporary art. Intimidated by the thought of raising a paddle? Partner Miriam Tucker advises attending an “unreserved auction,” where there is no reserve price. (They’ve unloaded pianos for pennies.) The average sale price at these events hovers between $300 and $500. (The next one is the weekend of April 19th to 21st.) Previews generally start the week before. “You can pick things up, ask questions, take photos, kick the tires,” says Tucker.

Afterward, meander over to Broadmoor Antiques (6 N. Union St., 609-397-8802), where 10 different galleries and dealers sell everything from Pennsylvania Impressionists (Walter Baum and William Langson Lathrop among them) to 18th-century armoires and cabinets to Georgian flatware, tableware and boxes, all under one big roof. Recent finds include an 18th-century refractory dining table, ocelot pillows, and a 19th-century trophy table perfect for setting down your glass of brandy. A designer cult spot. If you’re looking to recreate Lord Grantham’s study in Downton Abbey, this is your place.

Owner George Evans has renovated the late-1800s dry-goods store now known as Antiques on Union (32 N. Union St., 609-397-3300) to better display 10,000 square feet and three floors of antiques; he sojourns to estate sales in Palm Beach and beyond for clients and designers. Come here for furniture from 18th-century English Georgian to mid-century modern, Orientals and pricey porcelain. During a recent visit, I became obsessed with a circa-1950s, hand-cut Venini tubular glass chandelier sure to be the focal point of any room. Alas, not any of mine.

Two final stops: First, Jim’s of Lambertville (6 Bridge St., 609-397-7700) sells not only beautiful antique furniture, but also lovely impressionist art. Michael Herold Design mixes old and new. Housed in the Laceworks Building (287 S. Main St., Suite 8, 609-460-4763), this is mid-century nirvana, with lots of Lucite, glass and swanky Rat Pack fare (bar carts!), curated by a man anointed a “Next Wave” designer last year by no less an authority than House Beautiful. Recent pickups: Barbara Cosgrove metal quail lamps and Arne Norell safari chairs.

PRINCETON

On your way in to Princeton, make a stop in the picture-postcard borough of Hopewell. Inside the Tomato Factory (2 Somerset St.) lies Umbrella (609-466-2800). Owners Fay and Linda Sciarra scour antiques heaven Brimfield, Massachusetts twice a year, returning to set their finds in dramatic vignettes for inspiration: an oxblood leather Chesterfield sofa and mid-modern chairs are paired with an industrial coffee table. You’ll find vintage Eames chairs, an iron and marble Argentinian console, lots of ’60s Lucite tables, and an assortment of lighting from industrial to Deco. The biggest plus: Prices are downright reasonable, from $25 for a tchotchke to $6,500 for a pair of Vladimir Kagan white suede swivel chairs. (Love!)

Once in Princeton, the first stop is Judy King Interiors and Antiques (44 Spring St., 609-279-0440). She’s decorated abodes in Princeton, Maine and Bedford, New York (read: monied places), but her quaint shop is more cozy than imposing. Her resource library: Stark carpets, Bunny Williams and George Smith furniture, and Phillip Jeffries wall coverings that she mixes with English and French art and antiques you can buy right off the floor. Also stocked: English antique case goods, piles of 1820s and ’30s Staffordshire figurines, mid-century chaises and chairs, and antique sconces and chandeliers.

For nine years, Lei Xu has been selling antiques and art from all over Asia at Dynasty Arts (20 Nassau St., 609-688-9388), including early 20th-century scroll paintings and Japanese woodblock prints, as well as 100 year-old decorative wood carvings. Her glazed porcelain offerings span from ultra-rare Han dynasty pieces to 200-year-old ginger jars.

Your last stop is Leo Arons at The Gilded Lion (4 Chambers St., 609-924-6350). The professorial type, Arons favors both the unusual (a Himalayan jeweled headdress!) and the rare (a dressing table from Alexander Hamilton’s family; leaves from medieval manuscripts). Affordable collectibles include ceramic cosmetic boxes from a 500-year-old shipwreck ($100). The furniture can be a tad pricey, but really: Who can put a price on style?

Social Promotion

By Kathleen Nicholson Webber

Originally posted in the Philly.com on August 25, 2012.

In early 2009 Bridget McMullin went from 30 clients to five, and then eventually to none. After being in business for 12 years, the Haddonfield-based designer found herself with plenty of time to assess her marketing plan.

With no advertising budget, she addressed what she could: revising her website and starting a blog, where she would write twice a week about anything from establishing a design budget to choosing a TV for over the fireplace.

“That has been one of our most popular posts,” McMullin, 39, said.

Three years later, she hired four new employees.

“You have to commit to do it, but people are now finding me through my blog and then my site. I am giving away a little, but I have gotten so much.”

McMullin is one of many designers and architects who have either tiptoed or cannonballed into the unsure waters of social media to promote their business. Some have company Facebook pages, others tweet, some network through LinkedIn, still others have embraced the virtual pinboards of Pinterest or Houzz, an online home resource site.

But for every professional (not to mention the general universe) who sings the praises of these tools, spending hours a day offering advice, posting pictures and tweeting wisdom out into the ether, another calls them exercises in vanity, showing little return for a mighty investment of time.

“Our clientele is not a Facebook client,” says Philadelphia-based architect Spence Kass, who still gets many high-end projects in the city, including a Parc Rittenhouse penthouse and townhouses in Society Hill and the Art Museum area. And although he networks with tradespeople through LinkedIn and recently posted his work on Houzz, which has thousands of pictures of residential projects, he’s not impressed with the feedback.

“We mostly get readers asking ‘What is this paint color?’ or ‘Where do you get this faucet?’ I’d be surprised if it led to something.”

Designer Ashli Mizell says her website and word of mouth have kept her busy enough with projects in Philadelphia. “I have never had a client ask if I’m on Facebook or Twitter, and I have never felt it has hindered my business,” says Mizell, whose clients, on average, are in their mid-50s.

Neil Sandvold, architect and principal of Sandvold Blanda, also relies on his website, but he sends out news, too, about recent projects, like the latest Iron Hill Brewery in Voorhees, through his company Facebook page. The company also has a portfolio on Houzz with hundreds of page views. “Viewers have picked our projects for their inspiration boards. It certainly gets our name out there to a larger audience,” says Sandvold.

Houzz, which started in February 2009, can work as a powerful advertising venue, free of charge.

“Seventy-five percent of the calls I get are from people who see my work on Houzz,” says Ani Semerjian of Semerjian Interiors in Wayne. The designer, who regularly appears on NBC10’s The 10! Show, also blogs and has a company Facebook page. She recently landed a high-end client because of her online presence.

“Because I have so much content online, I am pretty searchable,” she said. Once she lands a client, she uses Pinterest to post ideas for his or her home, putting the client’s initials on them to ensure privacy. Clients can view the boards at their leisure.

Social media can be just as much a part of a firm’s institutional makeup as invoicing clients. Architect James Morrissey, principal of Morrissey Design in Flourtown, discusses with his team at weekly meetings what projects will be promoted on their Facebook page. A number of images are projected on a screen, and the group decides what to post. Project manager Tracy Chin writes the Facebook content three times a week, posts it, and then tweets about it.

One client, Scoogi’s in Chestnut Hill, saw photos of Morrissey’s work at Magerks Pub in Fort Washington and called the firm. When Morrissey completed a job for the mod Xilantro Restaurant in Wayne, a customer found his name through Facebook photos and hired him to work on her home in Vero Beach, Fla.

The conclusions designers draw about social media might just be a matter of available energy (if you can dedicate a lot of time to it, you’ll see results) and the demographics of their targeted clientele. Whereas a twentysomething looking to remodel her bathroom might start her design research on Pinterest, a 60-year-old is more likely to consult with the neighbor who raved about the guy who did her kitchen.

Another factor is considering clients’ privacy, especially residential ones. Who wants pictures of their living room out on the Internet? Some do, but many don’t.

Katie Guzinski, executive director of Marguerite Rodgers Ltd., says keeping projects private is part of protecting their brand and client. The firm recently joined Facebook in response to employees asking “Why aren’t we doing this?”

Employees can link to the MRL Facebook page or LinkedIn site but they aren’t allowed to post photos from any project sites. “It is important for us to be cautious about social media,” says Guzinski. The firm mainly uses its Facebook page for announcing projects or events, like the opening night of a 10 Rittenhouse condominium it furnished.

Susan Taylor has attended seminars at the last two High Point Markets – the popular semiannual North Carolina trade show for home furnishings – discussing the urgency of participating in social media, says the designer, who also owns the store Black Eyed Susan in Holicong.

With hundreds of blog followers, Taylor has been blogging for many years, documenting buying trips and giving design tips to engage clients. But it was her boards on Pinterest, which she joined a year ago, that recently earned her a new client.

A woman who had shopped at her store for years finally hired Taylor for an entire home project.

Taylor’s firm currently is establishing an e-commerce division, and she plans to use Pinterest to market it.

In the end, some find social media good for, well, socializing. Carrie Leskowitz’s two-year-old blog, Carrie’s Musings, has connected her with like-minded professionals.

“I haven’t gotten clients out of any of this, but my goal was to connect with other designers because this business can be isolating,” said Leskowitz, who is based in Fort Washington. But it’s a lot of work.

“I guess you have to ask yourself what your goals are if you want to start one,” she said of the three-day-a-week commitment. “For me, it is like another part-time job.”