A commercial real estate firm reported a lower office vacancy rate in the first half of 2016.
The report from Colliers noted that the “vacancy rate in New Castle County decreased overall, but the suburban market was on much more solid footing.”
Colliers Vice President Rick Kingery, said, “In the city, across multiple buildings, we are seeing quite a few expansions of existing businesses. I’d like to see a few more functionally obsolete buildings, that bring down occupancy statistics, to be taken out of supply and repurposed.”
Kingery continued, “In the northern suburbs supply is tight, and landlords should consider investing in modernizing any assets not keeping pace upgrading lobbies, landscaping, common restrooms, and even increasing window sizes. Quality office space is leasing in the northern burbs.”
According to the report, the downtown vacancy rate increased from 14.4 to 15.1 percent, mainly due to former Ashland space at 1301 N. Market Street (Hercules Plaza).
The report continued, “The Delaware Board of Trade will be operating a new 10,000-square-foot startup stock exchange that may bring further growth to financial services. The vacancy outlook for downtown Wilmington is murky.
Chemours has since made a commitment to stay in the city, but has not made a commitment to its current location, the DuPont Building.
The suburban market saw a 100,000 square feet of absorption.
The vacancy rate decreased from 12 to 11 percent. CSC (Corporation Service Co.) continues to expand with the construction of a new 148,000-square-foot building and the purchase of an additional building in Little Falls Corporate Center.
The Suburban Philadelphia market reported a vacancy decrease from 12.4 to 12.2 percent during the first two quarters.
Class A buildings outperformed Class B space accounting for all of the positive absorptions in the suburbs.
The limited choice of Class A buildings will begin to shift requirements to Class B buildings in suburban Philadelphia, the Colliers reported indicated.
