CENTER CITY REPORTS Monitoring Philadelphia’s Economic … · 2020. 10. 9. · gradually to 2,552 in the week ending September 26. Since early May, there have been well over 100,000

CENTERCITYPHILA.ORG

Restaurant and Retail Reopening Survey | 1

EMPLOYMENT

Between March and April, Philadelphia suffered the loss 101,200 jobs, 13.5% of all wage and salaried positions in the city. Over the next four months, employment rebounded by 43,400, a 6.7% increase, reaching 690,200 by August. However, the city's August employment level was still 8.4% below February’s pre-pandemic level.

The job loss in Philadelphia has been less severe than in some other East Coast cities. In New York City, August employment was still 14.7% below February levels, while in Baltimore employment was 10.6% below pre-pandemic levels. Washington, DC, however, was just 7.3% below February levels, slightly less negative than Philadelphia.

On a percentage basis, Philadelphia’s greatest employment losses have been in leisure and hospitality industries (including arts and entertainment, hotels, and restaurants), which shed 30,700 jobs (39.3%). Other sectors with large losses have been professional and business services, which fell by 8,200 (7.7%), other services, with a 2,900 (10.2%) decline, wholesale trade, which declined 1,300 (8.7%), and transportation, warehousing, and utilities, which fell 2,500 (8.4%). Educational services jobs declined by 18,400 (23.8%), but this loss is partly due to seasonality – the normal closing of schools in summer months.1

CENTER CITY DISTRICT,CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION

FIND MORE REPORTS AT:

CENTERCITYPHILA.ORG

OCTOBER 2020

1: Industry level employment data is not seasonally adjusted.

CENTER CITY REPORTS

Philadelphia is slowly recovering from

the economic impacts of the COVID-19

pandemic and the mandatory restrictions

on business activity that were imposed by

the Commonwealth and City government

in mid-March. This monthly report

tracks key indicators of the Philadelphia

economy and the vitality of Center City.

Monitoring Philadelphia’s Economic Recovery October 2020

MELVIN EPPS

CENTERCITYPHILA.ORG Center City District & Central Philadelphia Development Corporation

2 | Restaurant and Retail Reopening Survey

580.0

620.0

660.0

700.0

740.0

780.0

AugustJulyJuneMayAprilMarchFebruaryJanuary

732.2

749.9 753.4 748.0

646.8656.9

675.6 679.9690.2

731.9 734.3 735.6 736.2 769.6 736.6739.4

20202019

Source: Bureau of Labor Statistics, Current Employment Statistics, seasonally adjusted

PHILADELPHIA TOTAL EMPLOYMENT BY MONTH, 2019 VS. 2020 (IN THOUSANDS)

PHILADELPHIA CITY EMPLOYMENT TRENDS BY INDUSTRY (IN THOUSANDS)

FEBRUARY 2020 AUGUST 2020 CHANGE % CHANGE

TOTAL JOBS 753.5 680.5 -73.0 -9.7%

Mining, Logging and Construction 12 12.3 0.30 2.5%

Manufacturing 18.6 18.1 -0.5 -2.7%

Wholesale Trade 15 13.7 -1.3 -8.7%

Retail Trade 49.3 49.4 0.1 0.2%

Transportation, Warehousing, and Utilities 29.7 27.2 -2.5 -8.4%

Information 12.2 11.6 -0.6 -4.9%

Financial Activities 43.3 42.5 -0.8 -1.8%

Professional and Business Services 106.9 98.7 -8.2 -7.7%

Educational Services 77.4 59.0 -18.4 -23.8%

Health Care and Social Assistance 176 167.3 -8.7 -4.9%

Leisure and Hospitality 78.1 47.4 -30.7 -39.3%

Other Services 28.4 25.5 -2.9 -10.2%

Government 106.6 107.8 1.2 1.1%

Source: Bureau of Labor Statistics, Current Employment Statistics, not seasonally adjusted.

CENTERCITYPHILA.ORG


UNEMPLOYMENT RATE

Philadelphia’s unemployment rate increased from 7.0% in March to 18.2% in June, before declining to 15.4% in August. These trends are similar to state and national trends, although the city’s unem-ployment rate has been consistently higher than in Pennsylvania and the US throughout 2020. In August, the unemployment rate in Philadelphia was higher than in Washington, DC (8.7%) and Baltimore (9.3%), but lower than in New York City (16.3%).

Nationally, unemployment declined to 7.7% in September, down from 8.5% in August. Philadelphia's September rate is not yet available.

UNEMPLOYMENT CLAIMS

Since peaking at over 18,000 in the week ending April 4, initial claims for unemployment benefits in Philadelphia have declined gradually to 2,552 in the week ending September 26. Since early May, there have been well over 100,000 continuing claims in most weeks, although the number has declined gradually, and dropped to 85,101 in the most recent week in September for which data is available.

MONTHLY UNEMPLOYMENT RATES

0.0

5.0

10.0

15.0

20.0

Aug-20Jul-20Jun-20May-20Apr-20Mar-20Feb-20Jan-20

4.0

5.1

6.0

3.8

5.1

5.9

4.5

5.9

7.0

14.4

15.6

17.0

13.0

13.2

16.4

11.2

13.3

18.2

10.5

12.8

8.5

10.5

15.4

18.1

USA Pennsylvania Philadelphia

2,552

13,037

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

9/269/199/129/58/298/228/158/88/17/257/187/117/46/276/206/136/65/305/235/165/95/24/254/184/114/43/28

85,101

15,6850

40,000

80,000

120,000

160,000

9/269/199/129/58/298/228/158/88/17/257/187/117/46/276/206/136/65/305/235/165/95/24/254/184/114/43/28

INITIAL UNEMPLOYMENT CLAIMS, PHILADELPHIA, BY WEEK

CONTINUED UNEMPLOYMENT CLAIMS, PHILADELPHIA, BY WEEK

Source: Pennsylvania Department of Labor and Industry

Source: Pennsylvania Department of Labor and Industry

Source: Bureau of Labor Statistics, Current Population Survey and Local Area Unemployment Statistics



OFFICES

The Center City office market remained stable through the first two quarters of 2020. Asking rent in the second quarter averaged $33.67 per square foot, down slightly from the first quarter, while the vacancy rate was 13.0%, compared to 12.9% in the first quarter, according to Newmark Knight Frank. Net absorption was 20,399 square feet in the second quarter, down from 142,509 in the first. However, this only records the lease transactions between owners and tenants, not the number of office workers at their desks. Most building managers and firms still report actual occupancy of workers at below 10% of pre-pandemic levels.

With many office employees working remotely, the pandemic has caused some firms to delay making long-term decisions about office space, with many businesses opting for short-term lease extensions. The result was a 45% decline in leasing activity between the second and third quarters.2 However, average asking rent declined less than 1% in the Philadelphia CBD in the third quarter. According to Savills, the vacancy rate in the central business district increased to 12.4% in the third quarter.

CENTER CITY OFFICE MARKET TRENDS

Source: Newmark Knight Frank

2: Savills Research, Philadelphia Q3 2020 market report.

CONSTRUCTION

The Governor’s order to suspend non-essential businesses on March 19 led to a stoppage of nearly all construction in the city. Construction was authorized to restart on May 1. Total construc-tion-related permits issued by the City’s Department of Licenses and Inspections decreased by 39% between February and March and dropped an additional 67% between March and April. Since that time, however, permit activity has increased each month. August permits totaled 3,979, 27% below August 2019.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000


5,128 5,2914,722

2,880

938

1,852

2,793

4,169 3,979

4,747

5,590 5,850 5,935

5,275 5,1355,478

20202019

Source: OpenDataPhilly, L&I Building and Zoning Permits

TOTAL CONSTRUCTION PERMITS MONTH TO MONTH COMPARISON 2019-2020

Q1 2020 Q2 2020

SUBMARKET TOTAL ASKING

RENT (PRICE/SF)

TOTAL

VACANCY RATE

NET

ABSORPTION (SF)

TOTAL ASKING

RENT (PRICE/SF)

TOTAL

VACANCY RATE

NET

ABSORPTION (SF)

East Market $29.81 10.0% 45,838 $29.65 9.9% 6,660

Independence Square $31.12 15.0% 10,312 $31.18 14.5% 17,023

Walnut/South Broad $30.83 18.3% -27,621 $30.78 18.7% -15,649

West Market $36.14 12.3% 113,980 $35.90 12.6% 12,365

CENTER CITY $33.80 12.9% 142,509 $33.67 13.0% 20,399

CENTERCITYPHILA.ORG


Source: Center City District Survey

633Restaurants

Open for Pickup or Delivery Only

Open With Outdoor Seating

Open With Indoor Seating

Closed

41%

17%

15%

27%

RESTAURANTS

Source: Center City District Survey

1,036 Retail/ServiceBusinesses

Open

Closed

Apointment Only

Teleservice orOnline Only

66%

17%

13%

4%

RETAIL/SERVICE

CENTER CITY RETAIL AND RESTAURANTS

The state and City requirements to close non-essential business-es resulted in a significant number of closures in the Center City restaurant, retail, and service sectors. In mid-June, among 1,884 storefronts within the Center City District, 46% were closed, 33% were fully open, 12% were offering take out or in-store pickup only, while 4% were providing outdoor seating and take out. Beginning in July, restaurants were able to open for outdoor dining and retailers were allowed to reopen. By late September, 70% of restaurants were open with indoor or outdoor seating, or were offering pickup and delivery. In addition, 75% of retail stores and 54% of service business were either fully open, or open for appointments or curbside pickup.

Weekend street closures on 13th Street, Sansom Street, 18th Street, Arch Street and Drury Lane in the CCD have allowed restaurants to increase outdoor seating. Total outdoor seating within the District boundaries increased from 2,997 in June to 5,152 in September. For a full update on retail trends, see www.centercityphila.org/re-search-reports/restaurant-recovery-safe-outdoor-dining

Center City District & Central Philadelphia Development Corporation

MATT STANLEY

https://centercityphila.org/research-reports/restaurant-recovery-safe-outdoor-dining



0

500

1,000

1,500

2,000


1,12

01,

273

1,282

1,355

1,0

51

769

1,0

94

1,6

88

1,6

96

1,0

76

1,385

1,56

6

1,883

1,75

2

1,772

1,786

20202019

Source: Redfin

0

75

150

225

300

375

450


234

252

251

26

2

259

230

20

0

223

287

20

9

216

251

313

34

9

36

5

40

2

20202019

Source: Redfin

0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000


$187K$210K $218K

$240K $245K $230K$250K $248K $242K

$185K$200K $206K

$215K$230K $225K $220K

20202019

Source: Redfin

HOMES SOLD IN PHILADLEPHIA HOMES SOLD IN GREATER CENTER CITY

(THREE MONTH MOVING AVERAGE)

MONTHLY MEDIAN RESIDENTIAL SALE PRICE, PHILADELPHIA

HOUSING MARKET

Despite a reduction in residential sales in April and May, housing market activity has rebounded strongly, with total sales in August only 5% below last year’s level, according to Redfin. Within Greater City, residential sales are also increasing.3 Despite the pandemic, housing prices have increased somewhat from 2019 levels, with the median sale price consistently higher than the prior year through-out 2020. The median residential sale price in August was $242,000, 10% above the 2019 level.

Nonetheless, the pandemic is resulting in serious economic hard-ship which is likely to impact the rental market. According to the most recent data (September 2- September 14) from the Census Bureau’s PULSE survey, 17.3 % of reporting renters missed their payment for their last month’s rent in the US, compared to 13.3% in Pennsylvania, and 12.7% in the Philadelphia metropolitan area. The percentage of renters who deferred their rent was 2.2% for the US, 1.8% for Pennsylvania, and 3.7% in the Philadelphia region. On the owner side, 13.0% in the Philadelphia metropolitan area are behind on their mortgage payments compared to 10.3% in Philadelphia and 9.8% for the US.

3: The Greater Center City sales figures represent the average sales in the prior three months, and so are not comparable to the citywide residential sales data.

CENTERCITYPHILA.ORG


HOMES SOLD IN GREATER CENTER CITY

(THREE MONTH MOVING AVERAGE)

CITY TAX REVENUES

Monthly City tax revenues are an important indicator of the strength of the Philadelphia economy. Wage tax revenues reflect earnings of city residents regardless of where they work, and non-residents who work in the city. Real estate transfer tax revenues reflect the aggregate value of residential and commercial property sales, while hotel tax revenues reflect hotel industry revenue.

Wage tax collections in May, June and July were well below prior year levels, while August collections were higher by $24 million (15.7%). The city is projecting total wage tax collections for fiscal year 2021 to decline 5.4% from the prior fiscal year. Real estate transfer tax collections in the second quarter of 2020 declined 58% from the same period in the prior year, while combined July and August collections totaled $59 million, only a 3.4% decline from 2019. Hotel tax collections plummeted from $4.6 million in March to $400,000 in May but have since increased gradually, reaching $1.8 million in August. Still, August collections were only 28% of the prior year level.

0

50

100

150

200

250

300


$222

$246

$168$190

$210

$135 $134

$161$173

$155$181

$211

$165$146

$207

$150

20202019

Source: City of Philadelphia Department of Revenue

$0

$10

$20

$30

$40

$50


$25

$22

$21

$4

7

$14

$15

$13

$36

$23

$14

$24

$4

2

$28

$31

$31

$30

20202019


MONTHLY WAGE AND EARNINGS TAX REVENUE ($ IN MILLIONS)

MONTHLY REAL ESTATE TRANSFER TAX REVENUE

($ IN MILLIONS)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0


$4

.4

$5.2

$4

.2

$4

.6

$1.

9

$0

.4

$0

.4 $0

.9

$1.

8

$3.5

$4

.2

$6

.5

$7.

0

$8.2

$7.

7

$6

.3

20202019


MONTHLY HOTEL TAX REVENUE ($ IN MILLIONS)



PUBLIC TRANSIT

SEPTA ridership declined precipitously in March and April across all transit modes. Compared to January, April ridership was down by 81% on the Broad Street line, 79% on the Market-Frankford line, 89% on trolleys, 91% on City Transit division buses, and 91% on regional rail. By May, regional rail ridership dropped even further to just 3% of January’s level.

Since May, ridership has increased gradually. By August, City Transit Division bus ridership had increased to 54% of the January level, while ridership on the Market-Frankford Line and Broad Street Line had returned to 38% and 37%, respectively, of the pre-pandemic level. Ridership on trolleys had increased to 36% of January’s level, and regional rail ridership had increased to 18% of January.

Since the spring SEPTA has added safety ambassadors who urge riders to wear masks and hand out masks to those who do not have them. In the most recent survey taken in September, 90.3% of pas-sengers across all modes were wearing masks, 6.8% were wearing masks incorrectly, and just 2.9% were not wearing any mask at all before they were approached by a safety ambassador.

Broad Street LineMarket-Frankford Line BusTrolley Regional Rail

0

20

40

60

80

100

120


38

54

3736

18

Index, January 2020 = 100

Source: SEPTA

SEPTA RIDERSHIP BY MODE

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000


Source: SEPTA

Broad Street LineMarket-Frankford Line BusTrolley Regional Rail

19.9M 21.2M

18.8M

2.60M 3.25M

5.74M 6.04M

8.43M

SEPTA TOTAL RIDERSHIP BY MONTH SINCE JANUARY 2020

CENTERCITYPHILA.ORG


0.0%

20.0%

40.0%

60.0%

AugustJulyJuneMay

17.2%

28.5%

45.3%

51.5%

Source: Parkway Corportation

PARKING VOLUMES AS A PERCENT OF 2019

OFF-STREET PARKING

Parkway Corporation reports that across their multiple off-street garages, they are experiencing a slow recovery. In May 2020, parking volumes were at 17.2% of the same month in the prior year. Volume rose to 28.5% of the 2019 level in June and to 45.3% in July. In August, total parking volume increased to 51.5% of last year.

BIKE SHARE USAGE

Philadelphia’s bike share system, Indego, has over 500 bikes and 60 docking stations. Ridership in the first quarter of 2020 was relatively stable (around 40,000 trips per month), and after a decline in April has increased dramatically, to an all-time high of over 970,000 trips in June.

0

20,000

40,000

60,000

80,000

100,000

120,000

JuneMayAprilMarchFebruaryJanuary

30,27840,345 37,236 40,609

30,333

64,668

97,821

27,912

38,403

58,085

67,324

80,945

20202019

Source: Indego Open Data

MONTHLY BIKE SHARE TRIPS

SEPTA ridership has increased

from 2.6 million in April to 8.4 million in August



20202019

0

50,000

100,000

150,000

200,000

250,000

9/199/129/58/298/228/158/88/17/257/187/117/46/276/26/136/65/305/235/165/95/24/254/184/114/43/283/213/143/7

90,813

214,001

154,923

101,730

Week Ending

AVERAGE DAILY PEDESTRIANS IN CENTER CITY

PEDESTRIAN COUNTS

For more than a decade, CCD has managed 20 pedestrian counters, placed on prime retail streets and in the office district.4 With nonessential office, retail, and service workers urged to stay at home, pedestrian volumes dropped dramatically at the beginning of spring. The total number of pedestrians passing all twenty locations dropped from a 24-hour, daily average of 101,730 in the week ending March 7th to 17,161 in the week ended March 28th. Since that time,

pedestrian activity has increased gradually, reaching 90,813 in the week ending September 19th, 42% of the level from the same week in 2019. However, volumes on West Market Street and JFK Boulevard in the office district are only at 22% of 2019 levels.

4: The digital cameras record pedestrian movements on both sides of the block but for privacy reasons no visual images are recorded or preserved.

Source: Center City District

MATT STANLEY

Documents

CENTER CITY REPORTS Monitoring Philadelphia’s Economic … · 2020. 10. 9. · gradually to 2,552 in the week ending September 26. Since early May, there have been well over 100,000