The fire spread quickly through the building after it broke out just before 3:00 p.m. Sunday on the corner of Howard and O'Neil streets near Front Street and Girard Avenue.
The open space and wood framing fueled the flames.
Kristen Herrmann, who lives across the street, made the initial 911 call.
"Within 30 seconds there were flames shooting from the top of [the building]," Herrmann said, "I got on the phone and said, 'it's going to be big.'"
Firefighters say the fire was contained to the warehouse.
Tight space and electrical lines made getting hoses on scene more difficult, but crews were still able to prevent the fire from extending to nearby homes, many of them recently renovated.
"It's a labor intense operation and that's why we went to 3 alarms here," Philadelphia Fire Department Deputy Chief Joe McGraw said.
The fire shut down Girard Avenue for several hours.
Area homes were left in the dark without power.
The fire marshal's office has not declared a cause yet, but neighbors suspect squatters.
They also say the owner planned to remodel the warehouse into townhomes and demolition was set for next week.
"Honestly, we've been scared about this for years; we thought this would happen and it did," Herrmann said.
Officials say around a dozen people were evacuated from their homes as a precaution.
One person suffered a nose injury vacating his home.
The Red Cross was on the scene to aid those affected by the fire.