Delaware Office Market
After a few years of occupancy losses, vacancy appears to be stabilizing in the Delaware office market, bolstered by Incyte’s purchase of two downtown buildings formerly owned by Bank of America: Bracebridge I at 1100 N. King Street (372,118 SF) and Bracebridge III at 1100 N French Street (145,189 SF). The $47M sale ($92/SF) is a positive indicator for the office market. Incyte’s influence on Wilmington’s office market was swift and substantial, reducing the Class A vacancy rate by one-third, from 30.5% to 20.9%. In the second quarter, Wilmington’s office market experienced negative net absorption of 48,310 square feet. Despite this, the Central Business District (CBD) recorded robust positive absorption, totaling 38,093 square feet. The overall market decline was primarily attributed to multiple smaller tenants vacating space, rather than the exit of a few large occupants. For instance, FIS Global vacated 9,468 square feet on the fourth floor of 2751 Centerville Road, exemplifying the trend of smaller-scale move-outs influencing overall absorption figures. Vacancy rates increased by 30 basis points to reach 19.8%, representing a modest uptick over the previous quarter. However, with 420,792 square feet currently sought by active tenants, there is a strong indication that vacancy could decrease in the coming months as these requirements translate into leasing activity.