The northern Delaware office vacancy rate is showing signs of stabilizing as of the end of 2023.
That was the finding of a quarterly report from the commercial real estate firm Newmark. It mirrors an earlier report from CBRE. (See story below).
“Now that many financial and law firms have fully implemented their post-Covid space reductions, vacancies and availabilities have stabilized, the report noted. Newmark operates an office in north Wilmington.
Companies, notably JPMorgan Chase, have ordered their staff back to work. However, the financial services giant owns its buildings, and its holdings are typically not listed in office reports. The company did confirm that it is putting a site south of Newark on the market.
The northern Delaware office market ended up with 52,929 square feet of absorption, the highest total since the third quarter of 2021.
The vacancy rate stabilized in 2023. In the first three quarters of the year, the vacancy rate was 21.2%, decreasing slightly to 20.9% in the fourth quarter.
Asking rents were also stable. The $26.12 a square foot market average is unchanged compared to the fourth quarter of 2022 but is an increase of eight cents a quarter to quarter.
The biggest lease reported in the fourth quarter was WSFS signing a 30,989-square-foot agreement at 300 Bellevue Parkway in north Wilmington, consolidating three separate offices.
Electrical contractor Hatzel & Buehler added to its presence at the Delaware Corporate Center in north Wilmington by leasing 16,875 square feet for its corporate headquarters.
The law firm of Fox Rothschild signed a long-term lease for the 12th floor of 1201 N Market Street in downtown The law firm previously occupied a smaller space at 919 N Market Street.
The downtown Wilmington office market continues to see high vacancy rates that predate the Covid-19 pandemic. The downtown market did get at least a psychological boost when President Biden opted to open his national re-election headquarters in that area.
The high vacancy rate led Brandywine Realty Trust’s CEO Jerry Sweeney to throw out the possibility of converting their 300,000-square-foot office building at 300 Delaware Avenue into apartments.
Meanwhile, new construction remains on the modest side. The Walkers Mill Building at the redeveloped Barley Mill mixed-use complex and The Tower at Avenue North (the former AstraZeneca site in north Wilmington) are the only projects in development,
(Related story below)
