real estate

Research:

Define how this area is an example of an agglomeration economy.

Baltimore Avenue, located two blocks away from 808 S. Saint Bernard St., is a hub for cuisine and nightlife. Baltimore Avenue offers pizzerias, breweries, Chinese restaurants, ice cream parlours, bars, delis, and cafes, all within a 2 block radius of the property. In conjunction with the food and drink destinations on Baltimore Avenue are a liquor store, convenience store and a nail salon. Although these businesses are from different industries, they benefit from being located next to one another because they are essentially using the same common area. In a common area where there are numerous stores clustered together, customers are likely to end up visiting multiple stores, when they only intended on visiting one. The 50th St. Park and the Kingsessing Rec Center are located 2 and 3 blocks away from the property respectively; the Kingsessing Rec Center has a baseball field, tennis courts, basketball courts, a swimming pool and a library, all for public use. As displayed in the map below, Baltimore Avenue offers a plethora of food, drink, aesthetics, leisure and recreation destinations to provide residents with options that are conveniently within 5 to 10 minutes walking distance of the property.

In addition to dining, leisure, and recreation, the Baltimore Avenue area also offers residents necessities within a close distance to the property. For instance, there are multiple bus stops and light rail stops along the avenue, which shows that this is an area of high population density and attraction. Within a 6 block radius of the residence is a Fresh Grocer supermarket that provides convenient access to affordable groceries for residents. Another example of this is the numerous automotive businesses being located next to each other; Dynamite Detail Car Wash is located next to M&B Mufflers-Auto Care, which is located next to Sanchez Tire Center, which is located next to Baltimore Finest Auto Sales, which is located next to Alston’s Insurance and Auto Tags. Although each of these five businesses pertain to the automotive industry, they are not necessarily competing with each other because they are selling different goods and services. Most importantly, the Mercy Hospital is located 6 blocks away from the residence and the nationally acclaimed Children’s Hospital of Philadelphia is located within a 10 block radius of the residence directly off Baltimore Avenue.

What is the economic base for this area?

The largest centers of employment and commerce in the immediate area are the University of the Sciences, University of Pennsylvania and Drexel University campuses which are located within an 8 block radius of the property’s location. This massive cluster of world-renowned universities has a diverse student body of approximately 30,000 students combined. A large portion of the student body prefers off-campus living. Considering 808 S. Saint Bernard St. is located within walking distance of the universities and that there are countless businesses and late night food options off of Baltimore Avenue, it is an excellent off campus housing option for university students. Additionally, the universities combined are the largest employers in the area and presents a plethora of potential employment opportunities for residents of the area.

Is there a multiplier effect? If so...how?

With a large cluster of college students in the area, both retail spending and employment in the area is boosted. With plenty of affordable dining options in the surrounding area, college students have a diverse selection of different types of cuisine open late at night as well as a number of local bars and nightclubs. Likewise, college students looking for part-time employment have plenty of opportunities near campus, especially on Baltimore Avenue, to choose from. The money that the University brings from outside of the community (through its students) is spent and circulated within the local area. The average tuition is approximately $41,288, which means that the University is bringing in slightly less than $99 million in revenue every semester. The University is using its money from tuition to expand its location, which means opening up more buildings, facilities, and restaurants for students and locals in the area to use. The expansion of the University also means that there will be a significant amount of jobs created, which will further boost the local economy. Furthermore, with a student population that continues to grow, the local community will see more business. College students, especially coming from far away, are likely to use local businesses such as gas stations and grocery stores to meet their needs throughout the year.

What is the economic driver(s) for this neighborhood where the property is located?

There are two major industries that create economic activity in the area: Education and Healthcare. Education is the largest economic driver in the area with three large universities clustered within blocks of each other that boast a combined enrollment of 30,000 students. These schools boost the local economy by expanding their campuses to make room for more academic facilities, shopping centers, and dining options. These facilities, in turn, establish more employment opportunities for both students and local residents to benefit from.

Healthcare is also an essential industry that is responsible for economically boosting the local community. The Hospital of the University of Pennsylvania, along with it’s Children’s Hospital of Philadelphia subdivision, are top class healthcare facilities ranked within the top 10 in the nation. These facilities employ 7,229 employees combined as of 2018, as the size and scale of their operations create a plethora of employment opportunities for the surrounding area. These hospitals bring in a high amount of revenue from their services, which is allocated towards expanding facilities for higher employment and medical research that benefits the community they serve.

Who lives in this neighborhood and why? What are major land users in the area and how do the uses

impact your property? Good and bad.

The zip code in which the property is located in, 19143, has a median age of 34.5. Residents from ages 20 to 29 years old represent the largest population cluster with 16.7% of the total population, indicating a large presence of college students. African American residents make up the majority of the population at 84.3%. The unemployment rate in 2010 was 6.3% with households making a median annual income of $33,580, which implies that this is a working class neighborhood with ample employment opportunities.

Although the neighborhood is full of commerce and development, it is also quite residential. The majority of businesses in the area are on the first floor of mixed use properties that typically vary from 2 to 4 stories high. The mixed use nature of buildings in the area is a tremendous asset to the property, as it provides the convenience of commerce without the need for public transport. Since nearby residents can get to these destinations by foot, residents benefit from reduced automobile traffic that also reduces the noise and potential hazards that come along with it. Another convenience is nearby public transport that provides residents with affordable and accessible access to Center City Philadelphia.

How is the area segmented market (aka market segmentation) wise...is there a Whole Foods in the area, high end retailers etc.? Tell the story.

The local economy caters to the residents of the neighborhood. Since the neighborhood has a median household income significantly below national average, yet has an average unemployment rate, it is undoubtedly a working class neighborhood. With this being said, it is common to find cheap dining establishments such as fast food restaurants and Chinese takeout. Additionally, a majority of the grocery stores in the area are either bodegas, family-run markets, or discount supermarkets. There are no high-end dining or shopping centers in the area, as the local residents live paycheck-to-paycheck as do the university students paying their way through college.

Market Study:

Identify the two main competitors to your property.

Currently, Mallin Panchelli Nadel Realty, Inc, agent Michael N Hersch has launched a sale in Zillow

and Coldwell Banker. Therefore, these two companies are the two main competitors our company faces.

How are they similar?

First, the sales price of the two companies for the house is the same. Second, both companies offer customers

an installment payment method. Third, both companies have published the history of price changes and the

history of housing taxes for this property.

How are they different?

First, the property details they give are different, Zillow is more concise, and Coldwell Banker is more detailed. Second, Zillow gives

the rental price, but Coldwell Banker does not give it. Third, their estimates of property prices are different.

How do you plan to market your asset in terms of rents, targeted audience?

Due to the close proximity of three universities and therefore, a large number of students, with low

income/low budgets, we will be targeting a lower price range. Moreover, in addition to a large number of

students, the surrounding areas, have an overall, relatively low-income population. Taking these main

populations into account, our rents will be set at a low price range, suitable for the targeted audience.

What type of renovation do you plan for interior finishes?

We plan to renovate the interior renovations in a modern, yet safe and cost efficient manner. Considering that the house is fairly old and in rough condition, all appliances and flooring must be replaced. The flooring throughout the entire house will be replaced with vinyl wood panels for durability and easy maintenance and the bathrooms will have vinyl tile flooring. Furthermore, painting of the walls, repair of the stairs, replacement of the bathroom toilet, shower lining, bathroom sink, replacing kitchen countertops and backsplash, and renovation of the wardrobes. The walls will be painted a neutral gray color throughout the house and the stairs will have the same vinyl pattern as the flooring. The shower will have a modern tile backsplash for easy maintenance and to prevent rotted drywall. Likewise, the bathroom sink will have a modern basin and be equipped with a synthetic granite countertop. In addition, we will add energy-saving washing machines and dryers to reduce the cost of utilities. Additionally, we will install a stainless steel sink equipped with a garbage disposal and an energy efficient dishwasher in the kitchen.

Define your leasing plan.

Revitalize Properties is eager to develop affordable leasing plans for future tenants. We are offering one year leases that are attractive to our targeted customer base. We also will be offering two years leases at a special rate. Our goal is to keep vacancy at a minimum on our properties. We will also require a credit check, one-month security deposit, and first/last month’s rent. By doing this we hope to find valuable tenants.

Define your property management plan.

The property management plan for Revitalize Properties is one service technician for each location. The technician will take care of in-house maintenance as well as providing services for the outside of each complex (landscaping, gutter cleaning, etc.).

Define your renovation plan.

Our primary focus with the renovation of the property is to completely renovate the interior with modern finishes and new energy efficient appliances. However, these renovations are not complete without a thorough inspection of the structure’s existing electrical wiring, plumbing, bathroom drywall, and roofing. If any issues arise with these existing aspects of the structure, we will replace the existing system with a new, durable one to cut down on future maintenance expenses. Any issues with these systems could result in hazardous and potentially fatal consequences if left unchecked. To give our residents more peace of mind, we will install a security system that alerts residents when someone is at the door, requires a pin to be entered for entry into the house, and alerts police in the event of a break in. Although the exterior of the house is in satisfactory condition, we will remove weeds and overgrowth from the front and back areas of the house and grow grass over any dirt patches. Lastly, we will replace the old wood on the back steps to ensure safety of the residents.

Works Cited

“American FactFinder - Results.” American FactFinder - Results, 5 Oct. 2010,factfinder.census.

gov/faces/tableservices/jsf/pages/productview.xhtml?src=CF.

“Facts & Figures 2018.” Penn Medicine News, The Trustees of the University of Pennsylvania,

www.pennmedicine.org/news/publications-and-special-projects/facts-and-figures.

“Zip Code 19143 Map and Profile.” ZipDataMaps, Zipdatamaps.com, www.zipdatamaps.com/

19143.