The Philadelphia-based family business Korman Communities has significantly influenced housing development over five generations. From a local family enterprise, the company evolved into a major player in the real estate sector, today managing 40 properties across the USA and in London. Originally founded in the late 19th and early 20th centuries as Hyman Korman Inc., the firm later became Korman Company and now operates as Korman Communities under Co-CEOs Brad and Larry Korman. Brad Korman emphasised that the current name accurately reflects the essence of the business.
In an interview in early June, Brad Korman spoke about the history and strategy of the family business. He explained that his joining the family company was not predetermined. On Saturdays, he often accompanied his father to various properties. He observed how happy and passionate his father was at work, which deeply impressed him. Although he initially considered a career as a lawyer, he realised after his studies that this profession did not meet his expectations. He subsequently joined the family business.
To expand the business beyond Philadelphia, Brad Korman returned to business school. He wanted to develop a better understanding of investment banking, as the company had until then primarily relied on equity and was limited to the Pennsylvania, Delaware, and New Jersey region. His father had once stated that he wanted to be home in the evenings, which restricted expansion. Korman realised that significant growth outside the original region – such as in New York, Washington, or Los Angeles – would require larger investments that could not be financed solely with family capital. Twenty-five years ago, the company therefore began to build relationships with institutional investors, which marked a turning point for Korman Communities and laid the foundation for today's growth.
For a long time, the housing market in Philadelphia was not considered an institutional market, which led to low transaction volumes, little new construction activity, and stagnant rents. However, this changed in the last eight years. Philadelphia has established itself as an attractive investment location between New York and Washington. The city, the sixth-largest in the USA, offers a vibrant culture, sporting attractions, and good accessibility to natural areas. A significant impetus was a ten-year tax abatement, which expired in 2021, and led to a construction boom. From an average of 2,000 to 3,000 new residential units per year, the number jumped to 24,000 planned units. This significantly revitalised districts such as Northern Liberties and Fishtown and attracted extensive investment. However, the sudden increase in supply led to an oversupply, which made rent concessions, such as two months rent-free living, common in 2023 and 2024. The market has since stabilised; in desirable locations such as Rittenhouse Square, Washington Square, and University City, there was little new supply, which keeps these areas attractive. Rents have risen but are still below those of other major cities, making Philadelphia a very liveable and affordable location.
Korman Communities is also active in other markets. In the last two years, the company has seen successful projects: a property in Santa Clara, California, was fully leased in four and a half months. A successful lease-up was also completed in Paradise Valley, Arizona, near Scottsdale. There, the company had already successfully realised two projects in Phoenix. Further current developments include groundbreaking ceremonies in Denver and the completion of a construction project in White Plains, New York.
