A report from a commercial estate firm offers an upbeat assessment on the office market in Wilmington, thanks in part to more people moving downtown.
The latest edition of the Wilmington Skyline Review from JLL also noted that the riverfront area, which has seen $1 billion in construction over the years, has a vacancy rate in the low single digits. That is well below the high teens seen elsewhere in downtown. JLL was formerly known as Jones Lang LaSalle.
Those rates could decrease as more office space is converted to residential use.
The JLL report features an in-depth look at 25 of the most significant office buildings in the Central Business District (CBD), and the trends in the local and regional areas.
This report offers a snapshot of the market, “combining data-driven insights on the Downtown and Riverfront submarkets with individual building statistics,” a release stated.
“The story in Wilmington’s CBD today is one of transition and growth, as a number of new multifamily projects bring new eyes and life to formerly commercial areas,” said Blaise Fletcher, Executive Vice President, JLL. “Residential investment is attracting a growing talent pool to the city’s core, as outdated and underperforming buildings pencil out more favorably as housing. This bodes well for office leasing activity in the area.”
Highlights from the Skyline Review include:
- Wilmington’s CBD includes both the traditionally established office core (Downtown) and the more recently revitalized areas along the Christina River (Riverfront). Looking at these two distinct areas as a whole, recent years have seen only modest adjustments in vacancy, availability, and rates.
- A series of deliveries between 2005 and 2007 brought new product to the market just in advance of the subsequent downturn and recession, driving vacancy up from single digits to its recently stabilized range in the high teens.
- As an office market, the Riverfront currently outperforms the downtown, where rents have remained in the mid $20s for years.
- Given the smaller footprints of Riverfront buildings and the high desirability of this mixed-use area, vacancy hovers around 4 percent across the Riverfront Skyline set.
- As in past market cycles, small and mid-sized law firm transactions are a major
- The apartment market is surging in Downtown Wilmington, with a number of conversions underway on upper floors of commercial buildings, as well as new construction on vacant soft sites.
- The growth of a millennial workforce population is a primary driver of this CBD boom.
- The infusion of residential units will only serve to strengthen office market prospects, as the inventory tightens and the area continues to welcome a highly skilled and educated workforce.
