6C — April 26 - May 9, 2013 — Spring Preview — Mid Atlantic Real Estate Journal
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D elAWAre B roKer By David R. Morrison, NAI Emory Hill New Castle County Delaware office market outlook
T
he last quarter of 2012 indicated signs of over- all market improve-
far not meeting expectations that stemmed from the con- tinuing improvement seen
One favorable aspect of the market has been demand for medical office space. A new
planned on Churchman’s Rd. near Christiana Hospital and on Lancaster Pike at Little Falls although groundbreak- ing has not yet occurred on either site. Christiana Hos- pital is nearing completion of its new Emergency Center at Route 1 in Middletown, DE and we expect there will be interest in new medical of- fice space nearby. Springside Plaza, a 350,000 s/f subur- ban office/medical office park property in Newark/Glasgow, has completed improvements on two medical office pad sites anticipating continued
demand. Concerning general use of- fice space, high vacancy rates persist in most areas of the county. This is complicated by the growing availability of sub-lease space in large blocks and vacant or soon-to be vacant properties being placed on the market for sale. Several buildings are in re- ceivership or have been taken back by the lender. Despite these negative trends, some areas of the county continue to do well. For example, oc- cupancy in New Castle Cor- porate Commons off of Route 41 has remained over 95% making it one of the area’s hotspots of activity. The New Castle County Land Use Department re- ports only four permits have been issued over the last twelve months for new of- fice buildings. These permits were issued for the aforemen- tioned Beck’sWoods project.A few new office plan approvals have been issued including a 195,000 s/f project located between Rte. 7 and Rte. 4 near the Christiana Hospital in Stanton, Delaware. As mentioned above, ten- ants are taking advantage of market conditions and upgrading their space, effec- tively getting class A space for class B rents. This has been positive for tenants, but has also worked in fa- vor of owners of the higher quality buildings attracting interest. Marginal real estate suf- fers first and the longest. Owners who recognize this trend are investing in and improving their properties to compete effectively with the many options tenants have today. Springside Plaza is investing in a four-way signalized intersection at US Rte. 40 in addition to a new entrance and complete rede- sign of the park signage and landscaping. Hercules Plaza, one of the largest buildings in Wilmington’s CBD, is under- going a major renovation to upgrade and reposition the property. Both are examples of efforts to make the projects more competitive and a bet- ter option for prospects in a challenging market. David R. Morrison is a CCIM and partner at NAI Emory Hill in New Castle, Delaware. n
ment includ- ing increased act ivi ty in the office sec- tor accord- ing to most New Castle County own- ers and leas- ing brokers.
The last quarter of 2012 indicated signs of overall market improvement including increased activity in the office sector according to most New Castle County owners and leasing brokers.
last year. It seems most activ- ity so far this year represents smaller deals which are not resulting in positive absorp- tion as tenants are moving to take advantage of the op- portunity to upgrade or resize their space.
four building medical office project at Beck’s Woods on Route 40 in Bear, DE which started last year is nearly fully leased/sold out with the last building coming out of ground just this week. Ad- ditional medical projects are
David Morrison
Most professionals anticipated a good start to 2013 based on this performance. Although there are a few bright spots, early reports for 2013 are so
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Penns Plaza Two Penns Way, New Castle, DE
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Commercial Brokerage, Construction, Property Management, Maintenance & Residential Sales
10 Corporate Circle, Suite 100, New Castle DE 302.322.9500 18335 Coastal Highway, Lewes, DE 302.827.4940 www.emoryhill.com
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