Did You Know? July 2018

At the approximate midpoint of 2018 we are seeing local transaction remaining robust. We have summarized notable commercial real property sales located throughout Delaware below that have occurred between May and July 2018. Assets summarized below range from apartments, vacant land, retail shopping centers, office buildings, net leased real investments, industrial buildings, self-storage and special purpose properties. Leased investment sales below indicated cap rates from 5.8 to 9.9 percent with an average of 7.66 and median of 7.85 percent.

– 400 Delaware Avenue – is a one-story, 7,550 square foot former bank branch in Wilmington that sold in June 2018 with a 10-year, lease to Bank of America for $1.7 million, or $225 per square foot.

– The Horseshoe – is six unit duplex student housing complex located on E. Cleveland Avenue in Newark that sold in June 2018 for $1.45 million, or $80,556 per bed.

– 100 Paper Place – is a one-story, 43,185 square foot industrial building on 3.08 acres zoned CR that sold in June 2018 for $2.1 million, or $49 per square foot.

– Northeast Plaza – is a 22,240 square foot, strip shopping center located at 1200 Northeast Blvd, Wilmington that sold in May 2018 for $1,825,000, or $82 per square foot.

– Chateau Orleans Apartments – in Wilmington is a 168-unit, garden-style apartment that sold in July 2018 for $15.6 million, or $92,900 per unit.

– The Elms Apartments – is 24 units in Newark that sold in July 2018 for $1,700,100, or $70,838 per unit.

– The Wilmington Loew’s – in New Castle is 28.7 ground leased acres sold in July 2018 for $5.5 million.

– 86 Albe Drive – is a 9,975 square foot industrial building that sold in May 2018 for $1,025,000, or $103 per square foot.

– 14 Garfield Way – is a 42,305 square foot industrial, refrigerated warehouse building on 2.07 acres that sold in July 2018 for $1,700,000, or $40 per square foot.

– 107 Albe Drive – is a 22,970 square foot, multi-tenant, industrial/flex building on 1.69 acres that sold in June 2018 for $2.1 million, or $91 per square foot.

– Liberty Baptist Church – on Red Lion Road in Bear is 8.12 acres improved with a total of 15,211 square feet of buildings that sold in May 2018 for $2,025,000 million, or $133 per square foot.

– 20 acres in the Westown Business Park – located off Merrimac Avenue in Middletown sold in June 2018 for $4,250,000, or $16,100 per unit for a planned 264 unit, garden apartment complex.

– Bunker Hill Professional Centre – located at 102 Sleep Hollow Drive in Middletown is a two-story, 20,853 square foot office that sold in August 2018 for $3,815,000, or $183 per square foot.

– 1050 Industrial Drive – is a two-story, 20.,160 square foot multi-tenant, office in Middletown that sold in July for $1.7 million, or $84 per square foot.

– Former Safe Haven Animal Sanctuary – in Georgetown, Delaware is an 11,500 square foot vacant animal hospital on 13.23 acres that sold in June 2018 at auction for $880,000, or $77 per square foot.

– Barton’s Grand Rental Station & Mini-Storage – in Seaford, Delaware is approximately a 75,000 square foot mini-storage building and a 10,000 square foot retail showroom that sold in July 2018 for $5,125,000, or $60 per square foot.

Did You Know? April 2018

Nationally, nine years into the expansion economists expect a jump in economic growth in 2018. Real gross domestic product (GDP) growth, which was 2.3 percent in 2017, is forecast to rise to 2.8 percent in 2018.  Higher levels of economic growth are anticipated to continue into 2019 with economists predicting a 2.5 to 2.9 percent GDP growth rate.

  • According to the MBA, 2017s lending volume for commercial and multifamily mortgage loans closed at a record of $530.1 billion, up eight percent over 2016. Nearly a third of that total, or $151.2 billion, reportedly came from commercial banks, while GSEs came in second with $130 billion.
  • Commercial real estate loans at banks are at a record of $4.3 trillion, or 11 percent higher than before the Financial Crisis. According to the Green Street CPPI index commercial real estate prices collapsed nearly 40 percent during the Financial Crisis; then prices more than doubled from the low in May 2009 to the peak in September 2017, when the index was 27% above the peak of the prior bubble.
  • Economic growth and commercial real estate fundamentals overall remain strong. The exception is the retail sector due to changing demographics, the impact of E-commerce and tenant bankruptcies.
  • But the “retail apocalypse” isn’t occurring and facts and figures tell the story: 91 percent of all retail sales in 2017 occurred in a brick-and-mortar stores and physical retail store openings grew by more than 50 percent in 2017 thanks to the hypergrowth of dollar stores.
  • The outlook for commercial real estate in 2018 is positive based upon continued low unemployment and positive economic growth even with the headwinds of rising interest rates.

 

Locally, we have summarized several larger priced commercial property sales that occurred in the first quarter of 2018 below.

 

  • One & Two Greenville Crossing – is a 134,389 square foot retail/office complex located in Greenville that sold for $66 million in March 2018.
  • The Alder Park & Pine Grove Apartments – in Dover that total 311 units sold in January 2018 for $20 million, equivalent to $64,102 per unit.
  • Las Casas Apartments – in Wilmington sold for $10.3 million in March 2018, or $85,833/unit.
  • Walgreens in Milford sold in March 2018 for $6.575 million, or a $526/SF and a 5.7% cap rate.
  • 322 Ruthar Drive – is a 120,700 square foot industrial building on 10.67 acres that sold in April 2018 for $6.5 million, or $53.85 per square foot.

Did You Know…July 2017

Did You Know – July 2017

  • According to the Wall Street Journal, the median size of a new single-family home declined for the first time since 2009, slipping two percent to 2,422 square feet in 2016. This is only the third time in the last 20 years that it has fallen, according to U.S. Census Bureau.

 

  • The Wall Street Journal reported that about 854,000 new-owner households were formed during the first three months of 2017, more than double the 365,000 new-renter households, according to U.S. Census data. This was the first time in a decade that there were more new buyer households created than renter households.

 

  • As of midyear 2017 CoStar reports Delaware’s retail inventory of 30.3 million square feet was operating at a 5.0 percent vacancy rate; down from 6.2 percent reported a year earlier but slightly higher than the reported national retail vacancy rate of 4.8 percent.

 

Recent, larger commercial real estate sales in Delaware include:

The Astra Zeneca north campus at 1800 Concord Pike in Wilmington, Delaware sold on June 30, 2016 as part of a sale leaseback.  The property consists of a variety of inter-connected buildings containing 500,000 rentable square feet plus structured parking on about 80 acres.

Mill Creek Mobile Home Park with 770 pads on 117 acres sold to a group out of Michigan for $42,354,150, or $55,000 per pad.

Tri-State’s Self-Storage three property portfolio located in New Castle County totaling over 2,400 units sold June 20, 2017 for $40.25 million to iStorage.

1303 Delaware Avenue is a 15-story apartment with 231 units located in Trolley Square that sold July 27, 2017 for $39.25 million or $169,913 per unit.

Autumn Park Apartments in Newark, Delaware sold on July 10, 2017 for $35.5 million, or $99,162 per unit for its 358 apartments.

124 Sleepy Hollow Road, Middletown, Delaware is a 30,000 square foot, two-story, medical office building that sold on June 14, 2017 for $7.5 million, or $250 per square foot.

Linkside in Magnolia is three properties in Kent County, Delaware that sold in July 2017 for $15 million.  It included a 39,000 square foot shopping center, an independent gas station, a 60-unit apartment and a 10 unit rental townhouse complex.

A 10.21 acre commercial tract which was the former home to Tomato Junction retail produce stand on Coastal Highway in Rehoboth Beach sold in May 2017 for $13.5 million.

300 Executive Drive in Pencader Business Park – sold in May 2017 to Del Monte Fresh Produce for $6.5 million, or $36.47 per square foot.

The University Commons Apartments in Newark is a 32 unit complex on two acres that sold for $6.2 million, or $193,750 per unit.

 

 

Did you know – June 2017…

  • As of the 1st Quarter 2017 CoStar reports Delaware’s retail inventory of almost 30 million square feet operating at a 5.5 percent vacancy rate; this is slightly higher than their reported national retail vacancy rate of 4.8 percent.
  • Hunters Crossing Apartments in Newark, Delaware sold on June 1, 2017 for $52.5 million, or $77,206 per unit for its 680 apartment units.  The seller was Altman Management Company and the buyer was AION Partners out of New York.
  • The 240,780 rentable square foot, 14-story, office building at 802 Delaware Avenue in Wilmington sold on May 24, 2017 for $34 million, or $141 per square foot.
  • A large 10.21 acre commercial tract on Coastal Highway in Rehoboth Beach sold in May 2017.  This parcel was home to Tomato Junction retail produce stand located next to the Tangier Outlets.  It sold for $13.5 million.
  • The Walgreens at 5999 Summit Bridge Road, Townsend, Delaware – is a 9,999 square foot, double net leased property that sold on May 25, 2017 for $4.2 million, or a 6.2 percent going-in capitalization rate.
  • The Walgreens at 28517 DuPont Boulevard, Millsboro, Delaware – is a 12,000 square foot, double net leased property that sold in May 2017 for $3.65 million, or a 6.6 percent going-in capitalization rate.
  • Lidl Grocery – purchased 4.2 acres of land to construct a 36,186 grocery store at 622 E. Pulaski Highway, Elkton, Maryland for $1.55 million on May 5, 2017.
  • 913 N. Market Street, Wilmington, Delaware – is a 12-story, office building in the CBD that settled June 19, 2017 for $1,102,500, equivalent to $13.50 per square foot.

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Did you know – October 2016…

 Commercial Real Estate Market Facts – October 2016

  • The 4-story office building located at 1000 Uniquema Blvdin New Castle sold in early October 2016 for $2.3 million, or about $38 per square foot.
  • Two, suburban office buildings at 242 & 248 Chapman Roadand totaling 143,941 square feet sold in August 2016 for $15.5 million, or $107.68 per square foot.
  • A 485,987 square foot industrial manufacturing facility located at 400 Lukens Drivethat was fully leased to Zenith Home Corp. just sold in August for $27.5 million, or $56.59 per square foot.
  • 222 Lake Drive in Newark sold in July 2016 for $4.5 million, or about $55 per square foot. This industrial flex building totaled 80,075 square feet on 25.47 acres.
  • 701 Pencader Drivein Newark sold in August for a total consideration of $8.34 million for a 151,000 square foot warehouse building that was fully leased to two tenants.
  • 31/32 Trolley Squarea 5,760 square foot, three-story, mixed use unit sold in July 2016 for $1,150,000, or almost $200 per square foot.
  • The TD Bank ground lease in West Chester, Pennsylvania sold in June 2016 at a 5.26 percent cap rate.
  • The Chick-fil-A ground lease in Middletownsold in July 2016 at a 4.25 percent cap rate.
  • The AutoZone ground lease on Kirkwood Highwaysold in July 2016 at a 4.25 percent capitalization rate.