A report from the international commercial real estate CBRE lists northern Delaware as an emerging industrial market.
Demand has been strong for industrial space in the northern Delaware region, which includes portions of Maryland and Pennsylvania.
Northern Delaware offers warehouse and distribution providers an attractive combination of low operational costs, affordable property taxes and quick access to major metro areas, the report noted.
The region’s transportation infrastructure includes the full-service, deep-water Port of Wilmington. Many developers consider Northern Delaware as the next frontier along the I-95 Corridor and plan to deliver a number of new projects in the coming year,” said Dan Rattay, CBRE senior vice president.
According to the report, construction activity is expected to increase in the coming quarters as demand for space remains high, making northern Delaware one of the country’s top industrial growth markets for the foreseeable future.
The strong build-to-suit development market over the past decade is giving way to more speculative projects, and proposed facilities in both Newark and Wilmington, according to the report. Projects that started up as speculative development have been quickly leased.
The area’s industrial inventory totals 31.6 million square feet, mainly in facilities of between 100,000 and 250,000 square feet.
More than 1.5 million square feet. of positive absorption was reported in the first quarter of this year, lowering the overall vacancy rate to 0.4%. Average rent grew by 2.2% quarter-over-quarter to $8.70 per sq. ft., up by more than 54% from five years ago.
The Northern Delaware region includes Greater Wilmington and borders portions of Maryland, New Jersey, and Pennsylvania, providing it with a large labor pool.
New Castle County has a warehouse labor force of 9,165, according to CBRE Labor Analytics. It is forecast to grow by 4.4% over the next decade.
The report noted that 36 government-driven economic incentive deals totaling more than $62 million at an average of $12,672 per new job in the Wilmington area.
According to CBRE’s Location Incentives Group, one of the top incentive programs is the Delaware Strategic Fund, which supports business retention and expansion in the state.
Northern Delawre is also home to the Port of Wilmington. The port’s 800,000 square feet of cold storage capacity — the largest port-based capacity in the nation. Wilmington is one of the leading importers of fruit, handling more than 200,000 cargo units each year.
Additionally, Philadelphia International Airport, within a 30-minute drive from Wilmington, offers cargo services and will more than triple its capacity in a new project.
CBRE noted that institutional developers are seeking opportunities along the I-95 Corridor, a 1,900-mile north/south transportation route from Maine to Florida.
The report did not mention specific companies that have leased industrial space. Amazon has been a key player, opening three sites in the past year.