Philly's Current Industrial Landscape24 Jul 2017
Written by: Jon Tehrani
The transformations are beautiful.
Vacant factories - once the production sites for shoes, textiles, bicycles - revived in new incarnations as loft apartments or commercial, mixed use. With such a rich industrial history, and a population on the rise, we at FixList decided to explore the current landscape for industrial land in Philadelphia (for this report, land with an I-1, I-2, or I-3 base zoning). Where are industrial parcels located? How is the land currently being used? What trends are emerging in sales and otherwise?
Pictured: Oxford Mills in South Kensington - Image Source: Barton Partners
Leveraging our location intelligence platform, we analyzed the data and uncovered some big takeaways:
- The Office of Property Assessment (OPA) assigned a single family category code to 28% of the land for parcels with an industrial I-1, I-2, or I-3 classification.
- The six zip codes with the most sales of industrial land from 2008-2016 are 19122, 19124, 19125, 19133, 19134, and 19140 and contain (in total) nearly 24 million square feet of vacant industrial land.
- Of the six zip codes with the most sales since 2008, 19133 has the greatest ratio of vacant industrial land relative to the total sq ft of industrial land with 42% vacant. In contrast, 19124 currently has 81% of its industrially zoned land in use.
Figure 1 - Number of Industrial Parcels, Aggregated by Zip Code
With the exception of 19146, zip codes with the most parcels of relevant industrial land are concentrated in the Lower Northeast as seen in Figure 1. Only 28% of these parcels are actively being used for industrial purposes (see Figure 2) with equitable amounts either currently vacant land, or converted to either commercial or single-family residential.
Table 1 - Top 10 Phila Zip Codes by Count of Industrial Land Parcels
|Zip Code||Industrial Parcel Count||Sq Ft of Land (In Millions)|
Figure 2 - Number of Parcels of Industrial Land Aggregated by OPA Category Code Description
Location, Location, Location:
Industrial Land Sales Highlight Impact of a Healthier Residential Market
Figure 3 provides a year-over-year sales comparison between 2008 and 2016 according to most recent sale date, for the six zip codes with the most sales of industrial parcels during this time.
Unlike recession years, when sales in 19124 and 19134 inflated overall totals for the cohort, stronger performance post recession is the result of contributions from all six zip codes.
Figure 3 - Sales of Industrial Land, 2008-2016
19122 and 19125, zip codes with single digit sales during recession years, consistently realized significantly stronger performance since 2012, likely influenced by the emergence of these areas as Philadelphia’s hottest residential real estate sub-markets in recent years.
As seen in Table 2, the opportunity for reactivation of these industrial spaces is still impressive. Here, active land represents parcels currently being used for industrial, commercial, or residential purposes, and inactive land represents vacant land. Even in 19122, which had the second most sales of industrial land citywide in 2016, over 25% and over one million square feet of vacant land suggests the potential for growth.
Table 2 - Square Footage of Active and Vacant Industrial Land as of July 2017
|Zip Code||Total Current Active Sq. Ft.||Total Current Inactive Sq. Ft.||Percent Inactive|
Is Now the Time to Redevelop Industrial Land?
Reviving vacant, industrial land as residential and mixed use is likely to increasingly become worth the risk. Advances in technology are fundamentally changing manufacturing processes as well as consumer preferences, and recent population growth is contributing to a thriving market for real estate. Already, property assessment data suggests that more than half of the land with an industrial I-1, I-2, or I-3 base zoning classification is being used for residential purposes or is currently vacant, further suggesting a return to the manufacturing heydey of the mid-20th century is unlikely.
While this report focused in more depth on the six zip codes with the most sales from 2008-16, it’s worth noting that excellent opportunities exist citywide. For example, the zip codes which round out the top 10 most industrial parcels list (19146, 19116, 19145, 19136) each contain a significant amount of industrial land. Additionally, as sales numbers for the top six zip codes reflect, when residential sub-markets start to heat up then circumstances change regarding the viability of redeveloping nearby industrial land.
More detailed information regarding the zoning classifications referenced in this report can be found via the Philadelphia Zoning Quick Reference Guide.