Aerial view highlighting the potential redevelopment site of the former Hahnemann University Hospital.
New York-based HOW Group has placed a $5.5 million bid for the former Hahnemann University Hospital property in Philadelphia, marking their first venture outside New York. The property offers flexible zoning for potential multifamily residential development. With the auction set for September 24, the move indicates renewed interest in the revitalization of Hahnemann assets, previously facing limited activity. Other properties are also being auctioned, with Dwight City Group having already made a higher bid for different Hahnemann properties. Market conditions will influence the development timeline.
Philadelphia, PA – New York-based real estate developer HOW Group has made a significant move by placing a preliminary $5.5 million bid for a former Hahnemann University Hospital property located at Martinelli Park, at 300-304 N. Broad St. This acquisition marks HOW Group’s first venture outside of New York and is seen as a critical development in the revitalization of the property landscape in Philadelphia.
The Hahnemann University Hospital, which closed its doors six years ago after declaring bankruptcy, is now shedding several of its assets. The property at Martinelli Park is one of the last remaining vacant lots from the hospital’s former footprint and boasts Philadelphia’s most flexible zoning designation. This flexibility allows for dense and tall developments, making it an attractive target for residential projects.
Gary Jonas, CEO of HOW Group, has indicated that the company plans to pursue multifamily residential development at the site, contingent upon improvements in market conditions. While the team’s ambition is clear, they acknowledge that construction is unlikely to begin until a more favorable economic climate emerges, particularly regarding interest rates and construction costs.
The auction for the Hahnemann property is scheduled for September 24, and interested bidders must submit their proposals by September 19. The bid made by HOW Group was disclosed as part of a bankruptcy filing associated with Hahnemann University. Alongside their bid, other properties that belonged to Hahnemann are also being auctioned off. Notably, Dwight City Group has already placed a more substantial bid of $16.25 million for other properties previously owned by the hospital.
In recent years, the real estate market for former Hahnemann properties has shown limited activity, with only Iron Stone Real Estate Partners acquiring certain assets in 2021. The current interest generated by new bidders, like HOW Group, provides a glimpse of renewed interest in redeveloping these abandoned sites.
Interestingly, while HOW Group pursues this acquisition, PhilaPort is pursuing expansion of its own real estate portfolio with plans for a $90 million purchase of 152 acres adjacent to the Packer Avenue Marine Terminal. This ambitious project aims to enhance shipping capacity and create job opportunities, paving the way for significant economic development along the Delaware River.
The real estate market in Philadelphia is currently influenced by high-interest rates and rising construction costs due to expected tariffs, posing challenges for both developers and potential homebuyers. Over the past few years, the housing market has seen substantial price increases, with home values climbing markedly since 2020. This upward trend could significantly impact how quickly and effectively properties can be developed or sold.
As the auction date approaches, the dynamics of the Philadelphia real estate market remain in flux, with both excitement and apprehension lingering as developers and investors navigate a complex landscape looking towards future opportunities.
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