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Wilmington
Wilmington
WILMINGTON
OFFICE MARKET
SUBURBAN MOVE-INS PROPEL CURRENT CONDITIONS
POSITIVE OFFICE ABSORPTION Market vacancy dropped 20 basis points from 16.8% to 16.6%, quarter-over-
DURING UNPRECEDENTED quarter, on the heels of positive office absorption.
The global COVID-19 pandemic resulted in a statewide stay-at-home Amtrak committed to remaining in the downtown office market with its
mandate in mid-March and by the start of the second quarter, activity in purchase of 405 N. King Street (Renaissance Centre).
the Wilmington office market ground to a near-standstill. The mandate
ended on May 31st but some major office occupiers have kept MARKET ANALYSIS
employees on a work-from-home schedule due to ongoing health
concerns. Tenants across industries may consider redirecting some of Asking Rent and Availability
their workforce to work from home on a permanent or periodic basis,
Asking Rent and Vacancy
and the long-term impact this might have on office occupancy remains
unknown. $26 22%
$24 20%
There were a handful of significant new occupancies of office space $22 18%
that took place during the second quarter, which drove net absorption to
$20 16%
approximately 38,000 square feet and trimmed market vacancy from
16.8% to 16.6%. Most notably, Corporation Service Co., Fiduciary Trust $18 14%
and Bayada occupied a total of 38,351 square feet at 4250 Lancaster $16 12%
Pike in the Wilmington West submarket, and Swift Capital expanded its 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 2Q19 2Q20
footprint at 3505 Silverside Road to occupy the full 39,200-square-foot Direct Asking Rent (Price/SF) Vacancy (%)
building in the Wilmington North submarket. Suburban move-ins offset
the modest negative absorption sustained in the Wilmington Central Net Absorption (SF, Thousands)
Business District (CBD), which did not see any significant occupancies
this quarter but did sustain some smaller-scale vacancies. Among them,
375
Rosenthal, Monhait & Goddess, P.A., vacated 6,865 square feet at 919 275
North Market Street following the closure of their Wilmington office. 175
75
However, in the second quarter, one CBD office occupier made a very -25
-125
significant commitment to remain in the market: Amtrak purchased the -225
189,728-square-foot building at 405 North King Street known as the -325
-425
Renaissance Centre, which it now partially occupies. Apart from that -525
noteworthy user sale, another CBD office building traded hands in the 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18 2Q19 2Q20
second quarter, 824 North Market Street. Continuing the trend of out-of-
market investors acquiring well-positioned office assets in Northern MARKET SUMMARY
Delaware, Chopp Holdings purchased the 207,005-square-foot property, Current Prior Year Ago 12 Month
its first investment outside of New Jersey, for $16.5 million ($80/SF). Quarter Quarter Period Forecast
Total Inventory 17.7 MSF 17.7 MSF 18.0 MSF
Looking forward, the local office market will undoubtedly be shaped by
Vacancy Rate 16.6% 16.8% 19.2%
the legacy of COVID-19. In the near future, tenants planning to re-enter
Quarterly Net Absorption 37,740 406,879 (448,310)
high-density office environments will need to adjust measures for social
distancing, which could signal the end of the long-standing densification Average Asking Rent $25.67 $25.96 $25.90
trend in workplace design. This has the potential to mitigate inevitable Under Construction 0.00 MSF 0.00 MSF 0.03 MSF
space shedding as some tenants elect for more permanent remote
Deliveries 0.00 MSF 0.03 MSF 0.00 MSF
workforce strategies.
© NEWMARK KNIGHT FRANK | 2019 RESEARCH | 1
2Q 2020 WILMINGTON OFFICE MARKET
SUBMARKET STATISTICS
Total Under Total Qtr YTD Class A Class B Total
Inventory Construction Vacancy Absorption Absorption Asking Rent Asking Rent Asking Rent
(SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)
Delaware Market Area 17,715,844 - 16.6 % 37,740 444,619 $27.29 $24.23 $25.67
Chopp Holdings 824 N. Market Street Wilmington CBD Investment Sale 207,005
others in the Wilmington Metro. The 2008 financial crisis and ensuing Leisure/Hospitality
14.4%
recession was hard on the Wilmington market because of its
Other Services
concentration of financial firms but in this recession, the financial sector
will likely remain stable, or even grow. Government
12.0% 0.0%
-3.0%
9.0%
-6.0%
6.0% -9.0%
3.0% -12.0%
-15.0%
0.0%
May-15 May-16 May-17 May-18 May-19 May-20
Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20
United States Wilmington, DE, Metropolitan Division
United States Wilmington, DE, Metropolitan Division
Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics
LISA DENIGHT
Research Manager
215.246.2725
lisa.denight@ngkf.com
Newmark Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our data, there may be adjustments in
historical statistics including availability, asking rents, absorption and effective rents. Newmark Knight Frank Research Reports are available at www.ngkf.com/research
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