City Grill

Mack Stulb

Mack Stulb 

Some Philadelphia-area construction sectors are doing well, such as multifamily housing, life science, health care and higher education, Stulb says. But he adds, “All sectors are seeing some slowing down due to the continuation of rising interest rates, material costs and the uncertain financial markets.”

Demand for acute health care facilities to serve the aging population is rising, but large capital health care projects  are decreasing, Stulb says.  He attributes this partly to “a continuing shortage and high demand for nurses and other credentialed health care professionals, which has resulted in unanticipated higher salaries and employment benefits. Those costs are being directly absorbed by health care systems and further impacting their financial forecasts.” Stulb says life science “remains strong,” with 1.2 million sq ft of lab space breaking ground in first quarter 2023. He says Philadelphia is No. 2 in the U.S. for cell and gene therapy and first for National Institutes of Health funding. 

Corporate tenants drive the office market, he says, citing insurer Chubb’s plan to start work on a 430,000-sq-ft tower this year.