Construction of apartments continues to be on the upswing, with many projects around the Greater Lehigh Valley either proposed, under construction or opening.
One of the newest is the completion of 22 luxury apartments in the former St. Luke’s Information Technology building in Fountain Hill.
Cityline Construction of Allentown began renovating the 23,000 square-foot-site in January to convert the property into apartments. The building had been the site of the hospital’s data operations since the early 1990s.
“Because it was the former IT center for St. Luke’s, we had to remove a lot of digital lines,” said Tom Williams Jr., real estate director for Cityline.
He’s already received deposits for tenants and said he expects the apartments to be fully leased by August. With its proximity to Lehigh University and St. Luke’s, there’s been a lot of interest from students, he said.
Peoples Security Bank & Trust of Scranton financed the project, which cost $2.5 million to build, he said.
Apartment sizes range from 600 square feet for one-bedroom units to 1,200 square-foot two-bedroom units. The units are equipped with a refrigerator, microwave, range/oven and washer and dryer.
Estimated rents are $1,000 per month for one-bedroom units and $1,600 for two-bedroom units.
Projects such as these that repurpose older buildings into new uses provide strong benefits for the community and reflect the growth of the residential rental market.
Over the past few years, the market for apartments in the region has changed to a nearly solid high-end, upscale model, with nearly all units proposed starting in the $1,000 range. (While the market appears to be able to support high-end residential rentals, there’s a scarcity of affordable housing in the Lehigh Valley.)
Whether it’s the cities of Bethlehem, Easton and Allentown or the suburban markets of Upper and Lower Macungie townships, luxury apartments are hot.
For millennials and empty nesters, the main target demographic for this market, demand continues to appear strong, with no peak on the horizon.
But can developers still produce market-rate developments that include affordable housing?
One article explores this topic and can be read here.
Affordable housing projects are generally thought of as unprofitable. Whether more local developers will start proposing them here remains to be seen.