Landmark Properties Leases Student Housing Tower Quickly

Landmark Properties has seen significant demand for its new student housing tower, The Mark, in University City, with 80% occupancy achieved ahead of its debut semester, according to Bisnow. The tower offers high-end amenities and targets undergraduate students at the University of Pennsylvania. The firm's senior director, Aaron Stange, expects the university to grow in the coming years, driving demand for student housing.

The development pipeline for student housing in the neighborhood has now been depleted, and it is unlikely to change soon. Landmark Properties remains interested in developing in the submarket but is deterred by a restrictive affordability overlay. This overlay requires a certain proportion of new apartments to be affordable, making it challenging for developers to meet their return expectations.

The University City neighborhood has become an institutional student housing market, with hundreds of student renters moving out of traditional market-rate apartments. This shift is putting pressure on some landlords of older apartments while also bringing down rents and making units more affordable for non-student residents. University City District CEO Sarah Steltz notes that thoughtfully located student housing projects can reduce competition for traditional rental housing.

Steltz also believes that projects like The Mark can have a positive impact on the immediate neighborhood, including boosting demand for ground-level retail. The density of development like The Mark can improve foot traffic and make a meaningful difference for neighborhood businesses. However, the situation at Drexel University, which is experiencing financial issues, may impact enrollment and demand for student housing.

Despite the challenges, Landmark Properties' previous building, The Standard, was fully stabilized and reached nearly 100% occupancy within two years. The company expects student housing rents to grow, but at a slower rate than the national average. The broader West Philadelphia multifamily market has seen muted year-over-year rent growth, with rents increasing by 1.6% in the third quarter of 2026.

High interest rates and the affordability overlay are hampering new construction in University City. The overlay has drawn criticism from multifamily players, who see it as a major impediment to new supply. While there is a carve-out for universities to construct new dormitories, purpose-built student housing projects are subject to the same restrictions as other multifamily developments.

Without new student housing in the pipeline, rents are expected to rise. At some point, they may become high enough to make new student housing construction viable despite the affordability overlay. Stange predicts that the lack of purpose-built student housing will lead to increased demand for traditional rental housing, driving up rents and making it more challenging for non-student residents to find affordable housing.