If you've been on the edge of your seat since reading
the first half of my editorial, today is your day of relief. Read on to find out who the "Ft. Lee reject" is, and how this Center City condo story ends.
Then the first condo real estate office opened in a tiny ground floor space for resales and rentals. It was owned by an Irish ex-nun with a fondness for a nip. She hired a recently licensed youngster who had been politely rejected by realtor czar Joe Fluehr, Jr., for "not possessing the ability and aptitude to succeed in residential real estate sales."
It's an anecdote destined to be included in his own eulogy some day -- since the 22-year-old "reject" from Ft. Lee, N.J., and graduate of American University, was named Allan Domb.
Domb quickly rose to the No. 1 rank in luxury condo sales in the country. He decided to become a real estate specialist right then by discarding the potential of selling industrial buildings, townhomes, restaurants, or any other type of real estate, and instead master the fast-growing new market for upscale Center City condos.
Although interest rates were rising fast, home demand was still growing as empty nesters and "yuppies" -- the newest demographic in Center City -- sought Center City living.
Meanwhile, some Chicago developers, who arrived in 1979, seized the opportunity to buy prime locations in the City of Brotherly Love for a fraction of their real value as condominiums. They snatched up the best of Philadelphia's apartment buildings, including Society Hill Towers, Hopkinson House, The Dorchester, and The Philadelphian.
The rental apartments were quickly converted to condos, and easily prepared for sale to fulfill the need for quality housing with top-of-the-line services. It was far more than renters could expect from landlords watching the bottom line.
Plus, the income tax breaks enticed high-end former renters. They could get full write-offs of all mortgage interest, real estate, and school taxes against their own rising federal income tax brackets.
It came down to a win for condo owners and loss for apartment renters, due to simple economics. Owners didn't have to pay taxes on the profits when they sold their primary place of residence to buy another.
It got even better for condo and homeowners in August 1997, when President Clinton signed a tax reform bill retroactive to May 7 of that year.
It gave total exemption, of up to one quarter of a million dollars, to every single, widowed, or divorced individual who sold a primary residence. Double that huge amount of tax-free capital gain for married couples who chose to file a joint federal tax return.
The rest of the condo story is probably common knowledge. Prime locations saw new construction of purpose-built condos in Rittenhouse Square, Society Hill, and Washington Square. These buildings included The Rittenhouse, Independence Place, and others.
Also, The Lanesborough at 16th and Locust streets set a new standard for full-floor residences, and the Barclay Hotel emerged from years of neglect as the highest-priced condo conversion in Philadelphia history.
There are now over 9,800 Center City condominiums in prime, solid-gold locations -- the ultimate criteria for real estate today, as it was in my realtor father's days nearly a century ago.
Meanwhile, marginal locations have stumbled and staggered, in part because they're not within walking distance of prime Center City shopping, cultural institutions, and restaurants, and because parking is scarce and expensive.
But the condo lifestyle thrives in many places now. Empty nesters and "never nesters" seek to return to the city as their careers slow down, and morph into consulting and managing their life's investment capital.
This all has unfolded in one of the most stodgy and conservative cities in America, and in less than three decades. It's not an "Ozzie and Harriet world" anymore in Philly, that's certain.
Labels: Guest editorial, Jay Lamont, Rittenhouse Square, The Barclay Hotel, The Lanesborough
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