'Another DuPont': Incyte’s Delaware Office Expansion Has Wilmington CRE Players High On City's Future
Pharmaceutical company Incyte doubled its presence in Delaware when it purchased two historic office buildings in Downtown Wilmington last spring.
The city’s real estate community was still basking in the glow of that transaction and predicting more victories ahead at Bisnow’s Delaware State of the Market event Tuesday.
“It’s like another DuPont,” Buccini/Pollin Group co-founder Robert Buccini said, drawing a comparison between the drug manufacturer and the sprawling chemical company that has underpinned Delaware’s economy for more than two centuries.
Incyte bought 1100 N. King St. and 1100 N. French St. for $47M, or $92 per SF, according to Newmark’s fourth-quarter Delaware office report. The buildings comprise 517K SF.
The purchase and ongoing construction have “considerably altered the perception of the Wilmington CBD,” the report says.
“It’s going to bring well-paid employees to Downtown Wilmington,” said Mayor John Carney, who recently finished his second term as Delaware’s governor and took the city's top spot earlier this month.
Work on the King Street building is scheduled to wrap up in 2026. Once that is complete, it will house 400 employees, including dozens of workers now located in Chadds Ford, Pennsylvania, and a suburban office just outside Wilmington city limits. Buccini said he believes that metric could grow to 800 workers as the project advances.
There is also an expectation that Incyte will draw ancillary businesses to Wilmington, keeping the momentum going.
“We’re really looking forward to getting spinoffs from the folks that come in with Incyte as they move in to support the business,” said Johnson Commercial Real Estate partner Scott Johnson. “We’re anxiously waiting for that to happen.”
The Incyte project may be more of an outlying data point for the Wilmington CBD.
“We still don’t see a lot of transactions come in from the suburbs,” Johnson said. “We trade tenants a lot amongst the folks up here.”
Yet vacancy in the Wilmington CBD appears to be stabilizing after growing consistently in the wake of the pandemic. The vacancy rate in the neighborhood fell by 10 basis points quarter-over-quarter at the end of last year to 20.2%, which is lower than the 23% Newmark reported for the Philadelphia CBD in Q4.
Much of that shift can be attributed to Delaware’s legal industry.
The law firm Morris James LLP inked a 43K SF lease for six floors at the Avenue North mixed-use development, which is under construction in the suburb of Fairfax. The firm will move from its location downtown once the project is complete.
Law firms also signed some sizable lease renewals in the CBD last year. Those include Young Conaway Stargatt & Taylor, which recommitted to its 144K SF in the former courthouse at 1000 N. King St., and Potter Anderson & Corroon, which renewed its lease at Johnson CRE’s 1313 N. Market St. building, where the Bisnow event was held.
“The city of Wilmington wouldn’t be what it is without attorneys,” Buccini said.
Buccini said the city is also seeing a residential resurgence, reflected in the rents landlords can command. The median rent for a one-bedroom apartment in Wilmington was $1,810 last year, besting the $1,520-a-month average in Philly, according to a report from Zumper.
“We’ve been investing in apartment projects [in Downtown Wilmington] for six years,” 9th Street Development Co. principal David Rinnier said. “They continue to lease up great.”
Buccini said he often sees 20-somethings walking around at night, which was an uncommon sight just a few years back. Many of these newcomers aren't bringing cars with them, he said.
Buccini’s company owns four parking lots in the city, where demand remains down 30% from prepandemic levels.
“Our city is compact,” he said. “People tend to walk. … The [Amtrak] station is well utilized.”
But that doesn’t mean they are using buses run by DART First State, which Buccini said are generally quite empty.
“We just haven’t had the demand that I thought we would,” he said.
