Affordable Housing | Pennsylvania Market Update
Affordable Housing Investments & The Pennsylvania Economy
Multifamily investments in Pennsylvania are at an all-time high with more than $3.5 billion in sales in 2019. Major metros like Philadelphia and Pittsburgh continue to offer investors an attractive degree of stability, considering that average cap rates are more than a percentage point higher than those found in most prime Northeast markets. Pennsylvania also follows the national trend of increasing demand for Low-Income Housing Tax Credit (LIHTC) multifamily assets as they currently have an average sales price per unit approximately 63% less than market rate properties. Investors nationwide continue to rally around the ability to achieve market rate yields, or better, while investing in high quality assets at a deep discount to replacement cost.
Commonly referred to as the “Keystone State,” Pennsylvania is the 6th most populated state in the United States, with more than 12.8 million residents. Strategically situated in the Northeastern, Great Lakes, and Mid-Atlantic regions of the U.S., the state boasts a world-class intermodal infrastructure with an integrated network of interstate highways, modern freight railroads, three major ports, and six international airports. In addition, Pennsylvania offers all the essentials for a high-quality of life—prominent world-ranked universities, top-ranked health institutions, fulfilling careers, and an affordable cost of living—all while continuing to be an integral part of the social, economic, and political development of the nation.
Pennsylvania benefits from a highly diversified economy with a mix of industries, including agribusiness, education, energy, healthcare, information technology, life sciences, and manufacturing. As a result of no one single dominant employment sector, Pennsylvania boasts a stable economy with low volatility. And with nearly 250 postsecondary and higher education institutions awarding more than 194,000 degrees and credentials each year, Pennsylvania’s workforce pipeline is filled with highly educated employees. There are 20 Fortune 500 companies headquartered in the state, including Alcoa, AmerisourceBergen, Aramark, Comcast, Kraft Heinz, Hershey, Lincoln National, Toll Brothers, and Universal Health Services.