Future Cities
Emerging Industrial Markets: Northern Delaware
May 19, 2022
Northern Delaware offers warehouse and distribution providers an attractive combination of low operational costs, affordable property taxes and quick access to major metro areas. The region’s transportation infrastructure includes the full-service, deep-water Port of Wilmington. Many developers consider Northern Delaware as the next frontier along the I-95 Corridor and plan to deliver a number of new projects in the coming years.
Demographics
More than 21 million people live within 100 miles of Northern Delaware, with a projected growth rate of 1.6% over the next five years. The important 18-to-34 age group accounts for more than 22% of the total population. Within 250 miles, occupiers can reach 58.2 million consumers.Figure 1: Northern Delaware Population Analysis
Source: CBRE Location Intelligence.
Figure 2: Northern Delaware Warehouse & Storage Labor Fundamentals
Source: CBRE Labor Analytics.
Location Incentives
Over the past five years, there have been 36 economic incentive deals totaling more than $62 million at an average of $12,672 per new job in the Wilmington metropolitan area, according to WAVTEQ.According to CBRE’s Location Incentives Group, among the top incentive programs is the Delaware Strategic Fund, which supports business retention and expansion in the state. To attract businesses that pay sustainable wages, the Delaware Prosperity Partnership provides customized loans and grants to businesses for job creation, relocation, expansion and brownfield development.
Delaware offers a plethora of tax advantages, including no sales tax, no state-level real estate tax and no business use tax.
Figure 3: Top Incentive Programs
Source: CBRE Location Incentives Group.
Note: The extent of state and local incentives offerings depends on location and scope of the operation.
Logistics Drivers
Northern Delaware borders portions of Maryland, New Jersey and Pennsylvania, with convenient access to I-95, I-295 and I-495. The full-service, deep-water Port of Wilmington provides service to major U.S. East Coast metro regions. The port’s 800,000 sq. ft. of cold storage capacity—the largest in the nation—make it one of the leading importers of fruit, handling more than 200,000 cargo units each year. The port is also the largest on the East Coast for livestock exports.Philadelphia International Airport (PHL), within a 30-minute drive of Wilmington, offers expansive cargo services. The airport plans to triple its cargo facility footprint from 400,000 sq. ft. to 1.4 million sq. ft. over the next few years. New Castle Airport and Wilmington Airport also serve the region.
Supply & Demand
Northern Delaware’s industrial inventory totals 31.6 million sq. ft., mainly in facilities of between 100,000 and 250,000 sq. ft. More than 1.5 million sq. ft. of positive absorption in Q1 2022 lowered the overall vacancy rate to just 0.4%. Average rent grew by 2.2% quarter-over-quarter to $8.70 per sq. ft., up by more than 54% from five years ago.Many institutional developers are seeking development opportunities along the I-95 Corridor, a major 1,900-mile north/south transportation route from Maine to Florida. The strong build-to-suit development market over the past decade is giving way to more speculative project, proposed facilities in both Newark and Wilmington. Construction activity is expected to increase in coming quarters as demand for space remains high.
Figure 4: Northern Delaware Historical Data
CBRE Research Q1 2022.
Figure 5: Northern Delaware Size Range Comparison
CBRE Research Q1 2022.
Emerging Industrial Markets
Spotlighting markets across North America that offer demographic, logistics and incentives advantages for industrial investors and occupiers
