One of Philadelphia’s ultra-luxury condominium buildings is facing challenges in filling its units, missing high expectations for its offerings.
Arthaus, a 47-story tower located at Broad and Spruce streets, was envisioned as a rival to upmarket Rittenhouse Square. However, it has struggled to attract buyers, with only about 15 out of 107 units sold as of the summer, according to deed records, the Inquirer reported.
Prices for condos at Arthaus range from $1.6 million to $15 million for the bi-level penthouse.
While some buyers were drawn to the sweeping terraces and luxurious amenities, like valet parking and a rooftop garden, the building remains largely unoccupied.
Developer Carl Dranoff, known for his previous successes in the city’s condo market, cited the pandemic and rising interest rates as factors affecting sales. But he said about the future, emphasizing that Arthaus has inventory, property tax abatement, and a prime location, making it well-positioned for the market to rebound.
The luxury condo market in Philadelphia has its unique dynamics.
Unlike cities like New York or Miami, Philadelphia has historically attracted fewer international buyers. Furthermore, the pandemic has influenced buyer preferences, with more people opting for suburban living or retiring in the city rather than downsizing from suburban homes.
However, other luxury buildings in downtown Philadelphia have experienced stronger sales, demonstrating that the overall market is not entirely gloomy.
The Laurel, a nearby competitor, has outsold Arthaus, with more than half of its 65 condo units finding buyers. High-end Realtors say Philadelphia’s luxury condo market is healthier than ever, with record-breaking sale prices.
Despite the current challenges, Dranoff remains confident in Arthaus’s long-term prospects, suggesting that little new high-end condo development in the city will work in its favor. He plans to build several more rental buildings on South Broad Street, anticipating higher prices when new developments eventually arise.
— Ted Glanzer