Southern Land Company is opening the 363-unit apartment community 3601 Market Street in Philadelphia this summer. It is the first residential development at University Science Centeran urban research park on a 17-acre campus that will include several retail stores as part of a mixed-use development. units Magazine spoke with Southern Land Company CEO Tim Downey about his company's strategy for choosing retailers.
Q: What made this location attractive to Southern Land to use for a mixed development community?
Southern Land Company develops communities with a long-term view in mind. We want to create destinations that enhance the surrounding area, and bring long-lasting benefits to our residents, investors, partners and employees.
3601 Market's location is a great fit with this philosophy. Its location in the University City Science Center, between University of Pennsylvania and Drexel University, comes with strong demand for first-class apartment homes, and delivers the longevity and growth potential we are always looking for.
Q: How did Southern Land identify the retailers that would be part of the community?
Retail is a critical part of a successful community. The right mix offers amenities and convenience, not just to our residents, but to others in the community. In our research for 3601 Market, we identified a very large daytime populationmore than 60,000 people come into the area each daybut there was a lack of lunch and dinner options.
To fill that gap, we focused on a combination of full and fast-casual restaurants. We made a very conscious effort to select retail tenants that would fit the needs of the area without duplicating existing offerings, or each other.
University City is a fast-growing area. We did get quick and strong demand for our retail opportunities. However, we were careful to select the tenants we feel will bring the most benefit to the community.
Q: How do you negotiate rent charged to these retailers?
As you might expect, our rates are based on a rental pro forma developed in line with current market rents. We believe a location at 3601 Market is a great benefit for our retail tenants and our rental rates are aligned with the area market and the expected returns.
Q: What is your top priority for this project?
Southern Land Company's top priority is to create comfortable, beautiful communities. Having the right retailers is critical to making that happen. We are very excited to welcome Jimmy John's, Dunkin' Donuts, PWS, Danlu, Schmear It and Herban Quality Eats to 3601 Market.
Q: If you had to do it all over again, what would you do differently?
Given the need for dining in this area, if we were to start the project again, we would have designed 3601 Market's retail portion totally for restaurants. We will be working with our retail
tenants to make each space a great fit for their business, and are excited to bring such a great variety of offerings to University City.
Q: What would be one other piece of advice that you would give to other apartment developers on how to approach mix-use projects?
Develop to the highest standard. This is what we always strive to do, and it is what the market in Philadelphia demands, both in terms of what residents are looking for in a home, and in terms of looking to sell a property later on. Today's apartment renters are increasingly more sophisticated and demand high quality finishes and amenities. In turn, institutional buyers want the same when they acquire a property.