A fast-growing commercial real estate sector in northern Delaware remains tight with little room for newcomers or companies planning to expand.
That’s according to the commercial brokerage firm Newark, which in its third quarter report listed only 94,481 square feet of absorption. Newmark operates an office in Wilmington. The vacancy rate is a minuscule 0.2% With the vacancy figure that low, Newmark said there is a strong need for new construction. The industrial-distribution center vacancy rate in the Delaware Valley is 3.5%.
Developers have been working on the approval process for “spec” projects, primarily in Middletown, although potential sites have opened up at the First State Logistics Park, in Glasgow, just south of Newark and in other locations.
Asking rents for space did drop slightly in the third quarter.
The biggest deal in the quarter came from DuPont, which has proposed a 385,000-square-foot building in the above-mentioned First State Logistics Park.
The biggest sale involved a one million square foot Amazon building in Middletown, which went for $118 million.
Despite concerns over a recession, Newmark reports pent-up demand for industrial and warehouse space continues with land prices at record level. Driving demand is higher fuel prices and efforts to smooth out the supply chain. Newmark did acknowledge that the E-Commerce market has slowed down,
Not mentioned by Newmark is a slowdown by Amazon, the driving force in the industrial-distribution center boom in northern Delaware. A distribution center site near Delaware City carrying Amazon’s color scheme remains unoccupied.
Amazon is also cutting non-warehouse staff around the nation as it begins to “lock out” computers and disable key passes.
The company is addressing big losses at its Alexa voice assistant business that has never found profitable markets for the widely used technology.
