The Lenora features a vertical marquee welcoming visitors to Fishtown.
By: Ryan Mulligan
A newly completed mixed-use building on the edge of Fishtown is on the market for $17.7 million after its developer switched the residential units from condos to apartments.
The Lenora at 2636 York St. includes 42 units and 4,578 square feet of commercial space. A vertical marquee reading "Fishtown" hangs from the Northeast corner of the building, marking the start of the neighborhood. With interest rates high and many potential buyers sidelined, the Riverwards Group made the decision to make the 42 units available for rent, rather than put them up for sale as originally planned.
The market has responded to the switch to apartments, according to Riverwards, and the building is about 30% leased after three weeks. Mo Rushdy, managing partner at Riverwards Group, said he expects to reach full occupancy around the end of September. Rushdy said the firm is also closing in on a long-term lease with a "high-end beer distributor" in the commercial space. Philadelphia Beer Company, a beer distributor located just blocks away at York and Almond streets, recently closed and the site was tagged for residential development.
The Lenora is primarily one- and two-bedroom units, with studios that rent for about $1,400 to $1,500 per month. One-bedroom units offer up to 598 square feet with leases from $1,650 to $1,900 per month. Two-bedroom units span between 840 square feet and 914 square feet, with leases from $2,500 to $2,800 per month. Two three-bedroom penthouses will go for $4,800 per month.
Riverwards initially planned to sell the one-bedroom units for $299,000 and the two-bedroom units in the $400,000s. Rushdy said buying a $400,000 condo in an environment with sub-4% mortgage rates would have meant a payment of some $1,700 per month. Now, with rates hovering above 6.5%, the same unit would command a $2,500 monthly mortgage payment, pushing potential buyers out of the market and increasing demand for apartments.
Rushdy said that selling the Lenora as condos, while "doable," would have been "a slow burn."
"The math all changed," he said. "So then we quickly converted it into that multifamily and it exceeded our expectations in terms of demand, in terms of the quality of applications coming in."
The total buildout cost for the project was estimated to be about $15.5 million for the 55,000-square-foot building. Riverwards has traditionally sold its projects when they begin leasing, Rushdy said, and reverted back to that business model with the Lenora.
Ken Wellar, a broker with Global Real Estate Advisors who has the listing, said the development has already garnered interest from out-of-town buyers, specifically from New York. He added that there's a good possibility the Lenora will attract a 1031 buyer. A 1031 transaction allows real estate investors to exchange assets with capital gains taxes deferred.
"It's such a visible asset, in a prime location in one of the biggest growth parts of the city," Wellar said.
Last year, 18% of the apartments delivered in the city were in the 19125 and 19122 ZIP codes, which encompass much of Fishtown and parts of Northern Liberties, Olde Kensington and Olde Richmond.