The northern Delaware office market is still feeling the effects of moves by DuPont Co., according to a fourth-quarter report from Newmark Grubb Knight Frank (NGKF).
The absorption for the Wilmington metro market totaled 189,546 square feet for 2016, propelled by activity in the Wilmington north and south submarkets.
This pushed the overall vacancy rate down 50 basis points from the beginning of the year to 16.5 percent.
Wilmington North had the lowest vacancy of the four submarkets, closing the fourth quarter of 2016 at 11.5 percent.
The three suburban submarkets (Wilmington North, Wilmington South and Wilmington West) together recorded a 230,000 square feet increase over the last 12 months.
Suburban occupancy gains, according to NGKF, were highlighted by new leases with Zenbanx, which moved into 27,653 square feet at 650 Naamans Road; Prosper Market Place, which occupied 54,528 square feet at 400 Commerce Drive; and Solenis, which expanded by 13,383 square feet at 3 Beaver Valley Road. During the fourth quarter, Tata International moved into 13,987 square feet at 4250 Lancaster Pike.
Downtown Wilmington posted negative absorption for all four quarters totaling 37,402 square feet.
The Small Business Administration’s relocation from 4,223 square feet at the Nemours Building to 3,105 square feet at 1105 N Market Street was a notable occupancy in a very slow fourth quarter, NGKF noted.
DuPont’s future merger with Dow weighed on the CBD, as layoffs caused DuPont to vacate 32,000 square feet at 123 South Justison Street in the first quarter.
Neal Dangello, NGKF Senior Managing Director, said “DuPont’s merger with Dow remains a shadow over the Wilmington CBD market. The suburban submarkets will remain a center of tenant activity in the upcoming year.” Market momentum in the Wilmington CBD stagnated in 2016 with negative 37,402 square feet of absorption recorded for the year.
The Philadelphia regional report from NGKF took note of tightened vacancy rates in the suburban markets and a vacancy uptick in the Philadelphia Central Business District.
Rent growth surged in the Philadelphia CBD and was moderate across the suburban markets. Tenants were drawn to premium space, but activity in Class B product increased with certain tenants looking for more unique spaces in older buildings. The overall greater Philadelphia region closed 2016 with 1.3 million square feet in new occupancy gains, the brokerage firm stated.
Newmark Grubb Knight Frank (NGKF) is one of the world’s largest commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF’s 14,100 professionals operate from more than 400 offices in established and emerging property markets on six continents.
For further information, visit www.ngkf.com.
NGKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets.
