Another quarter of occupancy retraction pushed vacancy up 50 basis points to settle at 17.7% as reported in Newmark Grubb Knight Frank’s for Q2 2013 Wilmington, Del., office research report. In spite of modest gains by the business services and education and healthcare sectors, DuPont’s downsizing at its formerly-owned Barley Mill Plaza campus pushed net absorption negative over the past three months. In spite of two quarters of stalled demand, average asking rents remain higher on a year-over-year basis. This is the lagging effect of strong demand gains posted in 2012. Future rent growth is expected to be tempered by recent poor tenancy performances.
Another issue on the horizon for the greater Wilmington area is potential trouble for banks. Rising interest rates along with bond losses might put the brakes on some previously-approved employment expansions in the region. “While banks will work through some issues in the short-term, Wilmington’s office occupancy should weather the storm fairly unscathed as recent employment numbers show significant upticks in business services and education and healthcare hiring,” noted Neal Dangello, executive managing director with Newmark Grubb Knight Frank’s Wilmington office.
Key statistics for the Wilmington office market during the second quarter of 2013 are as follows:
• Vacancy Rate: 17.7%
• Absorption: -90,591 Square Feet
• Average Asking Rent: $23.65/SF, Full Service Gross
• Class A Asking Rent: $27.82/SF, Full Service Gross
Looking forward, one developing story to keep an eye on is the redevelopment plans for Barley Mill Plaza, owned by Stoltz Management Company. It failed to get approvals that would allow large-scale retail redevelopment at the site, so the original mixed-use plan for the site might be revisited. In the short term, any existing office vacancies in the campus remain available for lease and will have an impact on Western New Castle County office leasing fundamentals.
To access the full office report, visit www.ngkf.com/research.
To speak with a local market expert, please contact Mira Matic at firstname.lastname@example.org.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank (NGKF) is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, NGKF employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, NGKF serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.ngkf.com.
NGKF is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.