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 owned by Bank of America: Brace bridge I at 1100 N. King St (372,118 SF) and Brace bridge III at 1100 N. French St (145,189 SF). The $47M sale ($92/SF) considerably altered the perception of the Wilmington CBD. There was a net absorption of 43,292 square feet in Q4, with Wilmington West and Wilmington South leading demand at 38,009 SF and 23,231 SF, respectively. The pipeline remained stable with no new office deliveries in Q4. Only Avenue North remains in the construction pipeline and is expected to deliver next quarter. In 2024, over 443,000 square feet of leases were signed, outpacing leasing volume over the last four years. Vacancy rates decreased by 20 basis points to 18.9%. This decline is primarily attributed to lower vacancies in the Wilmington South (14.9%) and Wilmington West (15.8%) submarkets.