PNC Middle tenants signal on, exhibiting Wilmington market power
WILMINGTON – Much has been written about the worry that the COVID-19 pandemic will lead to an office exodus, imperiling central business markets that depend on their workers, but Wilmington has yet to see evidence of that concern. In fact, it has seen growing market strength, which was further exemplified with the renewal or new leasing of nearly a third of the PNC Bank Center.
On Aug. 19, the real estate brokerage CBRE announced that it has completed eight new or renewed office leases totaling more than 80,000 square feet at the PNC Bank Center, located at 222 Delaware Ave.
The new tenants at the building include a sales office for Hyundai Translead and the Edelstein Martin & Nelson law firm.
Meanwhile, three other law firms – Fish & Richardson, Eckert Seamans Cherin & Mellott, and Polsinelli, Seitz Van Ogtrop & Green – and Brew Ha Ha all signed lease renewals. The law firm of Wilson Sonsini Goodrich & Rosati also renewed its lease while expanding its space and will now occupy 24,180 square feet.
The leasing bump comes about a year after PNC Bank renewed and expanded its lease in the 273,000-square-foot Class A building. It has been a tenant at the property since the building opened in 1987.
CBRE Senior Vice President John Kaczowka, who represented the property’s landlord, Douglas Development, during the lease negotiations, said that one trend he’s seeing is national law firms entering the Wilmington market.
“We see that a lot these days, where a firm sets up an office here, kind of testing the waters with a new partner that they were able to attract to their firm,” he said, noting that trend began emerging in 2019. “They might start in a temporary space but they eventually find a permanent office.”
Although some analysts worry that increased work-from-home models may lead tenants to begin downsizing their leases, Kaczowka said that he didn’t see that at the PNC Back Center, nor did he see tenants taking more space in order to spread out associates with social distancing in mind. He said some gave back space, but those decisions were largely small in size and based on pre-pandemic changes.
Kaczowka said the new leases included renewals that were still a few years away from expiring and ranged between five and 10-year terms, showing the tenants’ confidence in the market. Most signed in the second quarter of 2020, amid the worst period of the pandemic.
The broker said that Wilmington’s efforts to revitalize its central business district, led by Buccini/Pollin Group’s restaurant and residential projects, has really begun to pay dividends, especially with employers that are looking to attract new young associates who want to live downtown.
“That is attracting companies and they’re looking at Wilmington and saying, ‘This is a pretty good place to be,’” Kaczowka said.
By Jacob Owens