New Castle County office market sees big deals, higher vacancy rate

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A report from Colliers showed an increase in the overall office vacancy rate in the second quarter for New Castle County.

The overall office vacancy rate for the county stood at 13 percent.

Both downtown and the suburbs saw big office deals.

Chemours’ decision to remain in Wilmington avoided a hit to the occupancy rate.

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However, Capital One’s consolidation into two buildings on Market Street will leave a large vacancy at Wilmington Plaza.

Also, Highmark Blue Cross/Blue Shield is giving back space that will be taken by Capital One.

Bank of America has put two of its three remaining office buildings in downtown Wilmington up for sale as it consolidates operations.

In the suburban market, CSC moved into its new building at Commons at Little Falls, Colliers reported.

Incyte continues to expand its complex at 1801 Augustine Cutoff, purchasing additional adjacent properties. However, HSBC will be closing its remaining call center space in Churchman’s Corporate Center in 2018. Sallie Mae may end up occupying that space.

Overall, regional office market had a stronger showing in the second quarter following a bumpy start to the year.

Nationally, a footprint reduction of 10–20 percent upon renewal is becoming the standard, and there are instances where the reduction has been significantly higher. The trend has hit the Philadelphia region as multiple large tenants renewed, downsized, or moved and consolidated, Colliers noted.

Developers are still cautious about speculative new construction, opting for retrofits and amenity upgrades to full building guts, the Colliers reported noted.

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