This year Jackson Cross Partners wanted to do something special during the holiday season so we decided to partner with Pathways PA and agreed to adopt 2 families for the holidays. Our goal was simple – bring some joy to a couple of families this year!
The response from the JCP family was tremendous! It was inspiring watching the gifts being put under the JCP tree every day — everything from toys to household items!
We hope that our sponsored families have a wonderful holiday season full of joy and laughter.
Wilmington, DE (December 14, 2011) – “Last year at this time, as we looked ahead, we indicated that we thought it would be at least the end of the second quarter of 2012 before we saw a substantive increase in leasing activity,” said Pete Davisson of Jackson Cross Partners at their annual Real Estate Forecast Meeting at the Hotel DuPont in Wilmington, Delaware. “Unfortunately, like so many other things relating to the economy the date of the strengthening in office leasing has continued to slip.
“Leasing activity during 2011 has been modest. While the demand from small business has held up well the Wilmington-New Castle County office market, the demand for new office space by medium sized firms has been weak, and the demand by larger firms was moderate.
“To put some specific numbers on the activity, fully 71% of the leases signed were for under 4,000 square feet. In the market for leases greater than 20,000 square feet, there were only five leases signed during the year. Only 19% of all leases were in the middle segment of the
market, leases for between 5,000 and 20,000 square feet. And to make the situation even worse there were no leases above 12,000 square feet in that range,” noted Davisson.
“Total leasing activity in the Wilmington-New Castle County office market totaled 569,000 square feet. The larger portion of that total was outside the Central Business District. At the current leasing rate we have a five year supply of available office space.
“Thank goodness there was only one new office building delivered this year or the situation would have been worse. The national vacancy rate for all classes of office space is 12.5%. Our overall vacancy rate is 21.2%, virtually the same as it was 12 months ago.
“Absorption, the net increase or decrease in occupied space, is the true indicator of the health of a market. On that score we aren’t doing badly. Absorption was negative for the year by slightly less than 59,000 square feet, but that was impacted by the addition of the one new 164,000 square foot office building. So, overall, while we did not get healthier, we didn’t really lose much ground”.
“Rental rates were steady during the year, with full service Class A rates in the CBD averaging $26.68 per square foot and Class A rates in the suburbs at $23.46. These numbers are very close to the 10 year average, and unchanged during the last 12 months.
“We have seen a number of positives during 2011. Bloom Energy purchased 50 acres at the University of Delaware’s Science and Technology Park. Johnson Controls purchased 34 acres in
Middletown and recently Amazon.com purchased 76 acres in Middletown for a 1.25 million square foot distribution center,” said Davisson.
The industrial side of the Delaware market has also seen modest activity. The vacancy rate in industrial buildings currently stands at approximately 10.5% and the average quoted rental rate is $4.04 per square foot, triple net. Nationally the average quoted rental rate is just more than $5.00 per square foot. As we compare markets the industrial market is faring slightly better than the office component.
Among the most noteworthy industrial transactions in Delaware in 2011 were: a 56,000 square foot lease at 405 East Marsh Lane in Newport to the Tile Market of Delaware; a 60,000 square foot lease by Goodwill of Delaware at Centerpoint Corporate Center; a 60,000 square foot lease by DYK Automotive in Pencader Corporate Center; a 62,000 square foot lease by the State of Delaware at 220 Lisa Drive in New Castle; and, the sale of an 83,600 square foot building at Pencader Corporate Center in Newark to Tek3.
“In the retail market vacancies are at a 20 year high, standing near 11%. The lack of new construction is keeping the number from going higher. On the retail side we have seen big box retail stores, and shopping centers, being converted to office space, medical services and museums.
“In the residential market in Delaware prices have declined in all three counties. In New Castle County the decline has been 13% since 2010. The National Associates of REALTORS says home sales are down because of weak consumer confidence and tight lending criteria.
“The big question is — What can we expect to see in 2012? We believe, along with most economists that we follow, that there will not be a double dip recession. We believe that we have seen the bottom and that it is behind us. However, we believe that most people will continue to bide their time and wait until they are sure that we are well on the way to recovery.
“We expect business leaders will continue to put off their real estate decisions for another 12 months, treading water rather than diving in. With that in mind we believe that mid-year 2012 improvements will slide into 2013, after the election, after year end accounting, and the 2013 New Year’s Eve Party. I am hopeful that the first quarter of 2013 will see improvements for us all and certainly for the real estate picture in Delaware”.
Jackson Cross Partners is a Commercial Real Estate company, focusing on a consultative approach to client service. The Jackson Cross team brings extensive experience in Corporate Real Estate, Brokerage, Development and Finance to the property life cycle. With offices in Philadelphia and King of Prussia, Pennsylvania; Wilmington, Delaware; and, Swedesboro, New Jersey, Jackson Cross provides market coverage throughout the Delaware Valley as well as access to markets throughout the world through its membership in the Society of Industrial and Office Realtors (SIOR).
Jackson Cross Partners is a NorthMarq Capital affiliated company. Through a joint venture with Fameco, Jackson Cross Partners provides Property Management and Retail brokerage services.