High-end and affordable apartments are coming to Philadelphia’s Navy Yard

The Philadelphia Navy Yard will soon have new, private housing for the first time in almost 30 years.

The sprawling office and industrial park, with its riverfront trails and rusting hulks of old warships, will see the groundbreaking Oct. 24 of a 614-unit residential project.

“We don’t have the opportunities to create new neighborhoods in an urban environment, well, really ever,” said Brian Cohen, managing director of Ensemble Investments, which is involved in the project. “We think that this sets the stage for what we want the Navy Yard to be, which is a neighborhood that’s representative of Philadelphia that’s inclusive of people of all incomes and backgrounds.”

Developed by Ensemble/Mosaic and Korman Communities, the project will be split into two buildings. One, dubbed AVE Normandy, will have 267 spacious units and higher prices, with 100 of them furnished for short-term corporate clients.

The second, a 347-unit building dubbed AVE Constitution, will have smaller units, as well as 92 deed-restricted units with rents affordable to those making 60% to 120% of annual median income in the area. That equates to between $55,000 and $110,000 for a two-person household.

The size of this initial project is meant to jump-start additional residential development in the Navy Yard. Almost 4,000 units are eventually slated for the former military base by the land owner, Philadelphia Industrial Development Corp. (PIDC), to help create a consumer base for restaurants and retail.

“This is really exciting and will be a key piece of creating this new community in Philadelphia,” said Kate McNamara, senior vice president for the Navy Yard with PIDC, the city’s public-private economic development organization. “We are really excited about the role residential will play in our 15- to 20-year master plan. It’s a great opportunity for a new residential community in Philadelphia.”

Extensive amenities include a resort-style pool, music studio, and movie theater. The buildings also will include many of the trappings found in the city’s other high-end multifamily buildings such as a gym, pet spa, library, and coworking areas that include a rentable boardroom.

“The amenity package we’re putting together is for everybody; it’s not going to be a divided community at all,” said Brad Korman, co-CEO of Philadelphia-based Korman Communities.

Since 2000, when the U.S. government transferred the land to local authorities, a deed restriction has barred residential development from the entire campus. As the Navy Yard grew into a potent employment hub, there was no opportunity to create housing for those who might want to live near work.

The military still had a presence in the Navy Yard, and authorities thought that having residential neighbors could complicate operations or possible future expansion plans for the armed forces. Some portions also required substantial environmental remediation.

The effort to bring residential development to the Navy Yard began in 2019, and two years later, Ensemble and Mosaic were selected to develop the project. The deed restriction was lifted in April of this year.

Korman said his company is excited to bring new life to a corner of the city without housing.

“I don’t think people realize how big it is; it’s the same size as all of Center City,” Korman said. “It’s almost like an island. There are only two entrances on and off the Navy Yard. From a safety and security standpoint, you literally have the ability to secure the entire area.”

He noted the appeal of the Navy Yard’s 6.2-mile waterfront, with biking and walking paths, and — crucially — a huge jobs hub. Research shows that since the pandemic, people are much more likely to work at the office if they live nearby.

“When we build an apartment property, we typically hope the jobs will follow,” Korman said. “Here there’s 16,000 people who go to work every day who have never had the option to live at the Navy Yard.”

The project is notable for its scale and ambition at a moment when spiking interest rates have chilled Philadelphia’s real estate industry. Many of the developments announced since 2021 haven’t broken ground yet and, in some cases, never will.

“It’s been really challenging,” Korman said. “We were very fortunate to have some great relationships with our lenders, and they stayed with us the entire time.”