Mid Atlantic Real Estate Journal — January 17 - 30, 2014 — 19A
www.marejournal.com
2014 F orecast Pete Davisson, SIOR, CCIM, Jackson Cross Partners Jackson Cross reports on an improved Wilmington office market
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occupied buildingwas converted to speculative ownership and multi-tenant occupancy) and yet other buildings were removed from the inventory (when for- merly available for lease build- ings became Owner occupied). The Jackson Cross inventory of buildings does not include owner occupied buildings in their sta- tistical analysis. “During 2013 there were a significant number of building sales and there are a number of buildings currently available for sale. Early in the year J P Mor- gan Chase purchased Christina Centre One and Three. In the
suburbs, the Cole Building and Sabre Wing at Iron Hill Corpo- rate Center were sold, and will be occupied by the new owners. “Two large buildings that were classified as owner-occupied, M&T Bank’s building on West 11th Street, is now classified as a multi-tenant building when they leased space to Capital One Bank, and the former Rollins Building, most recently owned by Astra Zeneca, is now owned by Applied Card Bank, and is available for lease. “There is an active list of build- ings for sale, which includes, 1001 Jefferson, First Federal
Plaza at 740 North King St., the Pennsylvania Railroad Build- ing on South French St., 1300 North Market St., the Uniqema Building at the foot of the Dela- ware Memorial Bridge, and 590 Naamans Rd., one of two office buildings that comprise Bran- dywine Corporate Center. In addition, there are three or four other buildings that are being actively marketed, but without ‘signs’ on them. “Clearly, 2013 was a positive year. Leasing activity returned to decent levels and vacancy rates fell. The big question is… ”What can we expect to see in
2014?” We have been watching the economic numbers closely and note with interest that third quarterGNPgrewat 3.6%, new job formation in November was over 200,000 jobs and the unemployment rate decreased to 7%. But, until the consumer and corporate executives become more positive, we are likely to continue to see office leasing in northern Delaware increase at a modest pace. “We have a great story to tell and all of us need to get out there and spread the news about the quality of life in the First State,” concluded Davisson. n
ILMINGTON, DE — “Leasing activ- ity during 2013 in-
creased over 2012 levels in bothWilming- ton’s Central Business Dis- trict (CBD) and suburbs,” s a i d Pe t e D a v i s s o n of Jackson
Pete Davisson
CrossPartners at their annual Real Estate ForecastMeeting at the Hotel DuPont in Wilming- ton. “However, it is important to remember that 2012 sawvery weak leasing activity, so we are comparing current leasing activ- ity against a weak base. “Leasing activity during 2013 in the CBD totaled 238,645 s/f. Leasing activity in the suburbs totaled 624,468 s/f up 55% from the ten year average in the suburbs. Fully 63% of the sub- urban total was at the former Wanamaker Building on theAu- gustine Cutoff, where the phar- maceutical firm Incyte signed a lease for the entire building. “Given the stronger leasing activity sublet space has all but disappeared as firms took advantage of short-term, low priced deals in both the city and the suburbs. “Vacancy rates are reflective of the leasing figures. In the sub- urbs the combined class A and class B vacancy rate fell 20% to 19.0%, while the combined rate in the CBD increased to 25.1%. Class A vacancy in the CBD stands at 17.8% while class B space vacancy remains very high at 41.4%. “With regard to rental rates, Wilmington and it suburbs mirror what is happening both nationally and regionally. Rental rates have not changed ap- preciably in the last five years. Asking class A rental rates in the CBD average $26.34 per s/f, full service, and $23.14 in the suburbs.Asking classB rates av- erage $20.54 per s/f in the CBD and $21.02 in the suburbs. “With leasing activity that was up compared to 2011 and 2012, absorption, the net gain or loss in total occupied space, also increased. This is most directly attributed to the positives of increased leasing activity levels with no new construction added to the office market inventory. The calculationwas made inter- esting this year by the fact that office buildings were both added to the inventory (when an owner
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