The first quarter office leasing report from Colliers showed the vacancy rate remaining flat in early 2018.
Asking rents were up slightly, according to the company, which has an office in Wilmington.
The report indicated that the downtown vacancy rate was down slightly from 16.8 to 16.7 percent.
Tenants continued to move between downtown buildings, with minimal, if any, increase in occupancy, the firm reported.
Additional tenants will be moving to suburban locations in the second and third quarters, which may negatively impact occupancy the report noted.
Rick Kingery Delaware vice president of Colliers says signs point to a brighter future for downtown.
“I believe the City of Wilmington is currently underestimated by most. Tours in Q1 were way up from levels of past years. The surge in apartment construction has created a situation where functionally obsolete office properties have progressively come out of supply to be converted to new uses,” Kingery said. “ As this continues the vacancy statistics will continue to improve and more importantly the new housing stock is changing the labor force data for the city. The real estate searches for major employers that are looking at a larger geography like “eastern seaboard” begin with Labor data, so this is a huge positive for the future of Wilmington.”
Kingery concluded, “If you have not visited the City in the last year, it is time to come see if for yourself… this town is changing and it’s not just the central business district or the Riverfront, it’s the starting to show on the East Side and West Center City as well. Construction is taking place throughout.”
According to the Colliers report, the suburban vacancy increased from 10.1 to 10.2 percent mainly as a result of Barclaycard and HSBC space coming back on the market.
HSBC vacated its remaining call center space in Churchman’s Corporate Center, with Sallie Mae backfilling a portion of the space.
Suburban activity has generally been stronger, particularly at projects such as Little Falls Centre, west of Wilmington, the Colliers report indicated.
The weighted average asking rent in Downtown Wilmington was ticked up to $25.74 per square foot, full service. The suburban average dropped slightly from $24.28 to $24.14, but this was due to the lease up of higher-priced space rather than a downward pricing trend.
The 60,600-square-foot, the Bank of the America-preleased building at 2951 Centerville Road is scheduled for second quarter completion. The office portion of the mixed-use Linden Hill development will also be completed in the second quarter. DelleDonne & Associates is renovating two of the former AstraZeneca buildings at 1800 Concord Pike for multi-tenancy. These blocks of 104,488 and 386,460 square feet will be available later in 2018. Pettinaro is renovating two buildings at Barley Mill Plaza, totaling 50,000 square feet, for 4th quarter 2018 delivery.
Investment Activity was on the rise in early 2018 in downtown, with Lynk Capital acquired 1220 N. Market Street at auction and is actively bidding out improvement work. The Brandywine Building at 1000 N. West Street, with a parking garage, is under new ownership.
Bank of America’s Bracebridge II and III were rumored to be under agreement to an investor for a short-term, sale-leaseback transaction. Rockwood Office Park and AIG’s Courthouse Square were under an agreement. 2200 Concord Pike (former Rollins Building) is actively on the market for sale as well, the Colliers report noted.
