When looking to rent her first apartment in 2016, 25-year-old Shira Scott settled on the Drake on Spruce Street in Philadelphia, lured by the historic building's "old world charm" and the safety of a high-rise with a doorman.
For Scott, an operations manager at the food-delivery service Instacart, the Drake's amenities — a fitness center, community room, and package-receiving service — were welcome additions, too. But with a gym membership elsewhere and a busy schedule, Scott said she hardly ever uses her building's facilities.
Instead, when Scott is looking to use a community space or other kinds of amenities, she walks five blocks to the Griffin at Broad and Chestnut Streets, where she meets her friend Melanie Highbloom, a resident in the recently renovated high-rise. There, they will lounge beside the fire pits on the building's rooftop or play virtual games on the lounge's TVs. Should they tire of those, they can turn to one of the Griffin's other offerings: shuffleboard, billiards, a round-the-clock gym, or periodic events such as pumpkin painting, wine tastings, and group fitness classes — all of which are offered for free.
That package — which can cost residents as much as $350 up front in a one-time "amenity fee," plus monthly rent ranging from $1,900 to $2,500 for a one-bedroom — is one of the latest examples in the amenity arms race that has swept the high-end Philadelphia residential real estate market. Gone are the days when gyms and WiFi-equipped business centers were considered top-of-the-line offerings in Philadelphia's multifamily buildings. Today, it's no longer uncommon to find apartments and condos with access to infinity pools, chef's kitchens, saunas, and treadmills for dogs.
It's a trend that is spreading in Center City and other popular neighborhoods after existing for years only in super-charged real estate markets such as New York, Miami, and Los Angeles. While most of these properties are targeted at middle- to high-income residents, the trend has captured Philadelphia's interest — and many residents' wallets.
"I think all of it is great; it's why I picked the building," said Highbloom, 26, the Griffin resident, who works for a local nonprofit and recently earned her master's degree in social work. "I wanted something new. It's my first apartment, and I wanted all the amenities."
"I looked at other buildings that were similar in price, but the Griffin's [amenities] were so updated and clean and in good condition," she added. "It was the newest. … I'd be the first to use them."
That "wow factor" is exactly what developers and property managers are hoping for. With an estimated 6,500 new apartments and condos expected to hit the Greater Center City market between 2016 and 2018, according to the Center City District — a 40 percent uptick compared with 2013 through 2015 — property owners and managers have been forced to get creative to lure and keep residents.
Often, that means offering the newest, sleekest, and trendiest amenities that could provide even the slightest advantage over other competitors. In many cases, that means simply offering more. At the Dalian on the Park, for example, an apartment building near the Art Museum, more than 13,000 square feet of amenities are offered inside the building — plus, an additional 30,000-square-foot "Sky Deck," all of which sits on top of a flagship-sized Whole Foods. Beyond that, the property touts a long list of resident services: loaner tools, valet dry cleaning, housekeeping services, bike rentals, plus more than a dozen others, according to the building's website.
Determining to what extent renters and condo owners actually use amenities varies by building and location. However, national and local data indicate that residents often like the idea of amenities in theory more than they do in practice.
For example, according to national 2017 data provided by the National Multifamily Housing Council and Kingsley Associates, 82 percent of 270,000 surveyed renters said they were "interested" or "very interested" in having a gym onsite.Yet in reality, the survey found, only 58 percent of renters actually use a fitness facility at least once a month.
"The view within the industry is that the leasing tour is more important than the ongoing use," said Michael Pestronk, CEO and cofounder of Philadelphia-based Post Brothers, which has developed properties including the Goldtex apartments in Callowhill and Presidential City along City Avenue.
What that means, he said, is that many development companies are focused on offering the most enticing amenity packages — even if they include services that residents may not frequently use. With so much supply, observers say, residents may choose the luxury building that offers just one more amenity or one more service, no matter how obscure or impractical it may be.
"Our average renter is 28, and Instagrammability is very important," Pestronk said. "That's not a cheesy sound bite. … We really want to spend time on what people think is cool on the leasing tour."
At Presidential City, where typical one-bedrooms start at $1,500 per month, the result has been more than 200,000 square feet of amenity space — among the most in the region. With four high-rise towers and 1,000 units, the property features three pools open year-round, waterside cabanas, a rooftop lounge, dry sauna, steam room, massage room, fitness center, and tanning booths, just to name a few.
Post Brothers already is thinking ahead about what to include at its next project, the Atlantic apartments, currently being redeveloped at Broad and Spruce Streets. So far, the team plans an array of rooftop attractions, including a dog park and drone landing-pad for package deliveries.
The gap between residents' ambitions and realities raises questions about which amenities make sense — and how much further the amenities arms race can go. Some observers suggest the race may be reaching a pinnacle, while others point out that cities such as Miami and New York have yet to hit a wall.
"At the Porsche Design Tower in Florida near Miami, instead of walking into the building, you drive into it, and an elevator takes you and your car up to the floor that you live on," said Michael Karp, the founder of University City Housing Co., which owns and manages residential properties in the region, including Roxborough's Summit Park. That community features more than a dozen amenities, including a clubhouse with food and drink specials, a tiki bar, pools, tennis courts, group fitness classes, an event planner, and more. "…People these days are saying, Why shouldn't I spoil myself?"
To be sure, observers say, Philadelphia's housing market does not yet have the capacity to stomach the apartment volume and rent prices that other U.S. markets see. However, observers have said, older properties could feel pressure to renovate and add more amenities — possibly driving up rents in those buildings, too.
Property managers and developers at older multifamily buildings say that they are doing just fine and that there will always be demand for more market-rate options that offer fewer amenities. The Drake, for example, where Scott lives, is more than 90 percent occupied, said Eric Babroff, regional director of Forest City Realty Trust, which manages the Drake and other buildings. Still, the Drake, where rents vary but currently start at $1,342 for a one-bedroom, according to its website, plans to renovate its lobby and select units this year to stay competitive, Babroff said.
And the luxury developers could be doing the same thing in coming months or years, observers say.
"I don't think apartment developers in the past had to think much about what they were doing. … We have traditionally built the same thing over and over," said Rick Haughey, vice president of industry technology initiatives at the National Multifamily Housing Council. "But now, when you're paying $3,000 a month, the expectations are higher. You have to deliver a better product."