Last year, Parkway Corporation CEO Rob Zuritsky shared plans to build a new 31-story luxury apartment tower in Center City.

However, high construction costs and rising interest rates led to uncertainty about when to start the project, writes Paul Schwedelson for the Philadelphia Business Journal.

As those conditions remain, Parkway is now scaling back those plans.

“To go high-rise now … is so expensive. It is incredibly expensive. Rents to justify that would also have to be record-setting. We pulled back on that ourselves. We’re thinking about another plan,” said Zuritsky.

Parkway is enduring the challenges that many developers are facing. Namely, since 2022, the Philadelphia Federal Reserve’s benchmark interest rate has increased from 0.25% to a 22-year high, 5.5%.

As a result, existing projects are being paused, new projects aren’t starting at the same rate, and developers are left waiting for the market conditions to ease up. 

New construction pays huge dividends, which is why Zuritsky is hopeful conditions will ease up in the near future.

“I’m just thinking about construction jobs, further investment in the city, which the city of Philadelphia needs desperately. You need that activity and that investment into the city,” Zuritsky said. 

Read more about Parkway’s and other developer’s outlook in the city at the Philadelphia Business Journal.

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