Delaware Office Market
Total net absorption for the Delaware office market registered 178,610 square feet during the third quarter, counteracting negative absorption during the first half of the year and bringing the year-to-date absorption total to 95,536 square feet. Positive absorption was driven by a handful of mid-sized tenant occupations—such as Morris James moving into approximately 46,000 square feet at 3205 Avenue North Boulevard—coupled with a lack of major move-outs. Strong absorption during the quarter pushed vacancy down 110 basis points to 18.9% as of the third quarter, well below the market’s peak vacancy of 21.8% recorded in 2023. Direct asking rents declined 230 basis points over the past year to $26.97 per square foot as of the third quarter, marking the first annual rate compression since 2020. While this decrease is minimal, it breaks a multi-year trend of steady rent growth despite weakening demand. The rental premium for Class A space remains significant, with a spread of $6.05 per square foot over Class B space.