Northern Delaware saw an increase in office space occupancy in 2017, according to the fourth quarter report from commercial broker CBRE.
The growth was aided by downtown Wilmington as companies leased space in sectors such as financial services, legal and chemical manufacturing (Chemours). The gains increased occupancy by more than 280,000 square feet.
The increased occupancy also led to vacancy rates to fall by three percent in northern Delaware.
The CBRE report cautioned that speculative office development in downtown areas in the Philadelphia region will put upward pressure on vacancy rates.
The overall vacancy rate in the region stood at 14.9 percent at the end of 2017, down from 15.3 percent in 2016.
The New Castle County office vacancy rate remains higher than the regional average at 17.6 percent, with a 19.1 percent figure for downtown Wilmington. Vacancy rates ranged from 9.7 percent in western New Castle County to 21 percent in northern New Castle County.
The downtown Wilmington market continues to see a high vacancy rate for older Class B office space with tenants moving to “trophy “ Class A buildings. In recent years, buildings have been demolished (Jefferson Plaza) or converted to non-office uses.
Factors affecting the outlook in the Delaware Valley market include companies “right-sizing” and using less office space and a forecast of moderation in office growth.
CBRE has an office in downtown Wilmington.
