Developers are taking a major step toward transforming the Navy Yard from an
employment center into a neighborhood.

Ensemble Investments and Mosaic Development Partners officially break ground
Tuesday on the first two residential buildings at the South Philadelphia property, a
project that will deliver 614 apartments and 25,000 square feet of ground-floor
commercial space at an estimated cost of $285 million.

Ensemble/Mosaic is partnering with Plymouth Meeting-based Korman Communities on
the apartment buildings, with construction scheduled to be completed in the third
quarter of 2025.

While Ensemble Managing Director Brian Cohen said the Navy Yard’s redevelopment has
been successful so far, the residential project is a turning point.
“With people now having the opportunity to live on the campus, it will make the Navy
Yard even more attractive,” Cohen said. “... It really turns the Navy Yard into a true
mixed-use, live-work-play neighborhood, which it has not been to date.”

One of the residential buildings, at 1200 Normandy Place, will have 265 apartments
across seven stories with 10,000 square feet of commercial space. That includes 100
furnished units that could be leased for a month or more at a time, which the developers
envision being used for corporate relocations or residents needing flexible lease terms.
The building will offer one-, two- and three-bedroom units and is set to have 30,000
square feet of indoor amenity space, including a business center, fitness center, golf
simulator, game room. It will also have 20,000 square feet of outdoor amenity space,
including a second-level pool terrace.

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At 1225 Constitution Ave., a six-story, 349-unit building is being planned with 15,000
square feet of commercial space. There’s 15,000 square feet of amenity space planned,
including a game room, bicycle storage area and outdoor courtyard and kitchen. Cohen
said a lot of amenity space will be shared between the two buildings. The Constitution
Avenue building features 92 affordable units rented to people earning between 60% and
120% of the area median income.

“When we thought about the vision for the project, we really focused on making sure we
were leaving opportunities for everybody,” Cohen said. “All demographics, all income
levels, but also flexible options. ... How do we, [within these 614 units], create a
community and a wide range of opportunities for everybody?”

In 2020, the Philadelphia Industrial Development Corp. selected Ensemble/Mosaic to
develop 109 acres at the Navy Yard. The full 1,200-acre site includes corporate
headquarters for Urban Outfitters and Tastykake, as well as space for several life sciences
companies. Last year, the developers unveiled a plan for nearly every aspect of the 1,200
acres. It adds up to a $6 billion plan with 9 million square feet of development
encompassing 4,000 residential units, life sciences lab space and retail space.

The existing employee base — the Navy Yard currently has a daytime population of
around 15,000 workers — will help create demand for apartments from people who want
to live nearby, Cohen said. A full-time population would help retail businesses be more
successful, creating a snowball effect.

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In the first two apartment buildings, the 25,000 square feet of commercial space could be
used for a couple full-service restaurants, and Cohen said Ensemble/Mosaic has already
received “a lot of interest from top restaurateurs.” Remaining space could be used for
services for residents like a small-format grocer, pharmacy, dry cleaner, bicycle shop or
pet store.

“We think this residential project will really build upon an energy that already exists that
we don’t need to force or create,” Cohen said. “We see this as the newest waterfront
neighborhood for Philadelphia that will be a vibrant 24/7 place.”

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Ensemble/Mosaic has committed to reserving 25% of the retail space for minority- and
woman-owned businesses, part of a larger push for diversity throughout the
development. That commitment includes half of the project’s design and engineering
being provided by minority- and woman-owned businesses, representing $4.3 million.
Moody Nolan is the project’s architect of record and Rodriguez is working on site and
civil engineering.

Forty-five percent of the construction spend, or about $90 million, is also being
committed to minority- and woman-owned businesses. Pride Construction is handling a
significant portion of construction. Ensemble/Mosaic plans to donate 2% of annual net

cash flow to a foundation supporting professional development and economic
empowerment for minorities and women.

Cohen called the pledges unprecedented — and they go along with plans for LEED silver
energy efficiency certification in both residential buildings and the incorporation of
affordable housing.

The first two residential buildings are important, Cohen said, because they’ll set the
standard for the rest of the Navy Yard and Ensemble/Mosaic wants to make sure the
Navy Yard is representative of Philadelphia overall.

“As developers, what we do has a long-lasting impact. It’s not just the financial
responsibility to our investors,” Cohen said. “It’s a responsibility to the community and
the city to make sure that we’re creating something that is going to be extremely
desirable and an asset for the city and for the community to embrace and enjoy. ...
There’s a greater vision and greater good that can occur with a development like this.”
Ensemble/Mosaic and Korman Communities announced last week that they secured
debt and equity financing for the project. New York-based minority- and woman-owned
Basis Investment Group committed more than $100 million in limited partner equity and
preferred equity investments. A $95 million construction loan was secured from M&T
Bank and Israel Discount Bank of New York as well as a $78 million construction loan
from Ullico.

Cohen said it was “extremely challenging” to finance the project, but the investments
show how others are buying into Ensemble/Mosaic’s vision.

After the initial residential project is complete, the next phase of development involves
building a full-service, four-star hotel next door with a restaurant, spa and banquet
space, though the timeline for construction has yet to be determined.

“We believe [the Navy Yard] will be one of the most desirable neighborhoods in
Philadelphia,” Cohen said.