NORTHEAST SNAPSHOT, NOVEMBER 2004

Allentown, Pennsylvania Multifamily Market

Allentown, Pennsylvania, is currently experiencing a marked increase in multifamily development. There has been increasing interest in residential developments within the center city district as more people seek to relocate to that area. The west end is also feeling the effects of heightened consumer interest. Throughout the city, demand for housing has spurred numerous developments.

With a population of 106,632 people, Allentown is the third largest city in Pennsylvania according to the 2000 U.S. Census numbers. Because of its large and growing population, the city is in position to undergo a significant surge in development. The largest concentration of residents is in center city, where 32,398 individuals reside. There are significant projects throughout the district, as young professionals and empty-nesters look to move into the downtown area.

“In Allentown’s center city there are more than 150 lofts currently under development and 70 units of new infill rowhomes,” notes Ed Pawlowski, director of the Department of Community and Economic Development for the city of Allentown.

“This is the first new development in the center city area in 20 years,” according to Pawlowski. He adds that because of the increasing demand, new projects are developing rapidly “and the market can easily absorb another 200 units [on top of current developments].”

There are a number of loft conversions and historic rehabs under development, adds Pawlowski. In center city, a building is being converted to house 40 loft units that will be named Auburn Street Apartments. Other redevelopments include the Eighth Street Apartments, the Sixth Street Apartments and the Farr Building, all of which will be converted to 20-unit loft complexes.

According to Pawlowski, there are a number of smaller developments under construction as well.

Along with the influx in multifamily construction, several developers that are new to the area have begun projects. Companies such as PennRose, Westrum, K. Hovnanian and Nic Zawarski & Sons have projects underway in the Allentown market.

Vacancy rates have remained low, between 3 and 5 percent, even with the large amount of development activity. There are no problems absorbing the new space. Rental prices for the popular loft units range from $600 to $1,200.

Developers in Allentown are reacting strongly to increasing demand for new multifamily residences with the most activity the area has seen in two decades. Even with the numerous projects underway, the market is still in position to absorb significantly more development. According to Pawlowski, the market is in an upward growth cycle with no evidence that it will decline in the near future.

©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.