NKF report: Northern Delaware office leasing market fares better than other areas in the region

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According to a report from the commercial real estate firm Newmark Knight Frank, office leasing activity in the Wilmington-area market remained limited in the third quarter due to the coronavirus pandemic.

NKF has an office in Wilmington.

Tenants continued with either partial orfull work-from-home policies. Occupancy of leased officespace remained low in the Wilmington area but remained higher than in neighboring markets, such as the Philadelphia Central BusinessDistrict.

Despite these headwinds, theWilmington office sector was remarkably stable in the third quarter, the report noted.

In Delaware, few companies offered their space up for sublease, contrasting with otheroffice markets in Greater Philadelphia, which have seen waves of space added to the inventory since the pandemic took hold.

Net absorption hovered around zero, as modest expansions and newoccupancies balanced out a handful of vacancies.

One notable changeoccurred in the Wilmington-area market in the third quarter.

The demolition of the long-vacant Barley Mill Plaza office park removed more thanhalf a million square feet of office space from the inventory. The plaza had been vacated several years ago by DuPont, with clusters of office buildings.

The redevelopment of this property spearheaded by local developer Pettinaro will yield a mixed-use campus anchored by Delaware’s first Wegmans supermarket.

The Wilmington region’s leasing volume during the third quarter was essentially half of the figure in the third quarter of 2019.

The overall demand for office space will continue to be impacted into the future, the report stated.

An exception came from law firms in downtown Wilmington due to the expected rise in U.S. Bankruptcy Court cases.

Law firm tenants leased new space or expanded an existing footprint during the third quarter, including Wilson Sonsini Goodrich & Rosati, which renewed its existing space at 222 Delaware Avenue and expanded by an additional 10,000 square feet.

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