More parking structures could be on tap for suburban office complexes as employers pack more employees into less space.
This comes as office vacancy rates decline in northern Delaware, thanks to a few larger deals that included Sallie Mae spin off Navient taking space on the Wilmington riverfront.
In addition, JPMorgan Chase purchased the South Campus of the AstraZeneca complex, although that transaction does not directly affect the vacancy rate.
Still the drop in vacancies would have been greater if employers had stuck to the traditional figures of employees per thousand square feet. “Corporations are doing more with less,” said Rick Kingery, vice president of Colliers, which has an office in Wilmington. One example was auto insurer 21st Century (Farmers) that vacated one floor in an office complex in north Wilmington and now occupies two floors.
According to Kingery, current office designs often call for cubicle clusters with open space for meetings and other purposes. A report from Colliers says the trend is causing some landlords in the Delaware Valley to reconfigure parking to meet the higher densities.
One example of the trend came when JPMorgan Chase expanded to new quarters in the Iron Hill Corporate Center in the Ogletown area south of Newark. A key part of the project was a parking structure.
Owners of another office complex in the Newark area that lost a major tenant are reportedly weighing the possibility of constructing a parking structure in an effort to lure an employer.
Current New Castle County codes call for a ratio of parking spaces to square footage that may be about half the figure that employers are putting into buildings
That is making some buildings obsolete when it comes to attracting corporate employers.
One example is the 1001 Jefferson Plaza building on the west end of downtown Wilmington.
The building, which has been largely vacant for nearly a decade, was sold for about $5 a square foot, with plans calling for demolition that will clear the way for parking. That was according to a report from Newmark, Grubb, Knight Frank. The firm has an office in Wilmington.
Also believed to be off the market is an office building in the Pike Creek area that is expected to be converted to another use.
There is less need for parking structures on downtown, due to the use of mass transit and employers using other options for parking, Kinger says. For example, Capital One, uses a bus service between sites. Other employers offer parking elsewhere or ask employees to look for their own spaces.
Kingery says the loss of those buildings and perhaps others will put downward pressure on vacancy rates.
Longer term, he expects the trend toward more employees in less space to ease somewhat, although the days of moving to larger offices with each promotion may be a thing of the past.
