Delaware: Small State Offers Big Opportunities in Real Estate
While Delaware is the second-smallest state in the country, it offers diversity in real estate product, positioning, and location. Wilmington, for example, sits at the most accessible urban crossroads of the Mid-Atlantic region—an exit off I-95— that places it within a two-hour drive of Washington DC, Baltimore, Philadelphia, and New York, 17% of the American population. Downstate, Delaware beaches are a powerful draw to retirees and aging baby boomers, with beachside living that rivals anything available along the Northeast Corridor. Just inland, along the Delmarva Peninsula, some of the richest farmland in the country produces food and livestock for nearby urban markets. Here is a snapshot of what is happening now in Delaware’s diverse and strengthening real estate landscape:
Employment Hubs Drive Demand In the new world order of real estate, proximity, employment, and access account for the lion’s share of opportunity. In other words, location, location, location is again the key driver. In Delaware, location is being dictated by a number of emerging employers, who are joining with the state’s traditional petrochemical and banking industries to drive demand for both residential and commercial properties. For instance, in Newark, university-centric development has spurred increasing development activity in and around the University of Delaware (UD). The college is redeveloping the nearby 272-acre property that formerly housed a Chrysler manufacturing plant into the University’s Science, Technology and Advanced Research (STAR) Campus. Where once 5,100 workers assembled Chrysler LeBarons and Dodge Durangos, today a new generation of technology and medical science workers are plying their professions, thanks to the current development partnership between the University and Delle Donne & Associates, a Wilmington-based real estate development company. Delle Donne first transformed the steel skeleton of the previous Chrysler administration building into UD’s new College of Health Sciences that will enable cutting-edge, patient-centered research by both faculty and students that will have a positive impact on expanding the academic curricula while leading to new methods of clinical practice. Following the opening of the UD Health Sciences campus, Delle Donne completed the full renovation of the adjoining almost 70,000 s/f structure called STAR II. Already, SevOne, a Delaware homegrown network infrastructure company, moved its primary corporate office to the site, which will provide the necessary space for employees to work while providing ample room for future growth. Bloom Energy’s East Coast fuel cell manufacturing center also calls the STAR Campus home. M&T Bank is proud to support The University of Delaware, Delle Donne, SevOne, and Bloom Energy as the key drivers for current and future tenants and growth at the STAR Campus. We believe in what is happening at the campus and look forward to the positive impact it will have for Delaware’s economy.
Just northeast along I-95, the Christiana submarket shows additional future development promise due to a recently completed $120 million highway interchange project that now seamlessly connects I-95 to Route 1 – the two large arteries that define Delaware state travel. A godsend for weekend beach goers, the project notably improves access to southbound Route 1 connecting Wilmington to the southern portion of New Castle County reducing previous commuting congestion for the Bear, Middletown, and Smyrna markets. Delaware flourishes as a retail hub because it is one of the few places in the country without a sales tax. The Christiana Mall’s dominance as one of the most successful malls in the country, evidenced by its often full 6,700 parking spaces, continues to attract additional retailers including a newly opened 100,000 s/f Cabela’s, new state-of-the-art Cinemark Theater, and the launch of the Allied Retail Properties’ 600,000 s/f Christiana Fashion Center abeam the mall to the south. Also contributing to real estate market growth in Christiana are a cluster of services industries, including the nationally acclaimed Christiana Health Care Systems and Sallie Mae, the student loan serving agency that employs 1,200 professionals in the area. The submarket’s vibrancy opens new suburban office opportunities as alternatives to Wilmington.
Downstate is Now Upscale Further down Route 1, Lower Delaware’s beaches are among the most prized, yet under the radar coastal markets, perhaps in the entire Northeast. Rehoboth, Dewey, and Bethany Beaches for years have been the playground for nearby vacationers. Their reputation is now spreading, as New York, DC, and Northern New Jersey residents are actively considering these quieter beaches as alternatives to the more crowded Jersey beach scene. Retirees and aging baby boomers are also fueling demand for upscale, adult living in the area. The 2013 opening of the Hyatt Place in Dewey Beach is setting a new standard for condominium living while single-family residential communities just east and west of Route 1 are developing quickly at varied price points. Sussex County officials and developers expect more influx as boomers look for better value, lower cost of living, and less crowded beaches for second homes, condominiums or full-time retirement properties that allow for easy beach living while still easily connected to the Northeast Corridor.
Banking’s Role in it All With the new realities of real estate, banks have refocused on the traditional factors of location and employment. Strong management teams, with clearly articulated business plans, are moving forward on both the residential and commercial fronts here in Delaware. And M&T is helping. As one of the state’s largest banks with more than 1,800 employees in 41 branches in the state, M&T is large enough to offer the services and sophistication of a large regional player, but still with the personal touch so important to localized real estate market. That’s important, considering the big opportunities Delaware has to offer today and for the bright future ahead.