Tuesday, May 2, 2017

DuPont Building Set for Major Overhual

The purchase of the DuPont Building and Hotel DuPont in Wilmington, DE has finalized, with the city’s most active developer - The Buccini/Pollin Group (BPG) - announcing its purchase from chemical company Chemours last week.

The DuPont spinoff has reportedly signed a 17-year leaseback of approximately 260,000 square feet at the property, which it acquired as part of its detachment from DuPont back in 2015.
While the price tag always matters, perhaps a more important number is $175 million - the projected price tag for BPG’s conversion of the outdated mixed-use asset into a defining centerpiece for the downtown’s ongoing transformation.

"The purchase of the DuPont Building and its assets couldn’t make any more sense to us right now," said Chris Buccini, co-president of The Buccini/Pollin Group. "There is no better way to coalesce our long-running vision for a vibrant downtown where people come together to live, work and play, than to take on the DuPont Building and re-envision it as a modern version of what it has always been, a lifestyle center for the City of Wilmington."

The Wilmington-based developer has been driving an effort there for the better part of two decades, and the DuPont Building deal aligns closely with the joint effort between BPG and the City of Wilmington to add 5,000 new residents to the area between 2015 and 2020. The renovation plans include gutting the existing office space and apportioning some of it for 180 apartment units. While the unit mix and asking rents haven’t been finalized, BPG has said that it expects rents to come in around $2/SF. This is in the range of the higher-end Residences brand that BPG has developed around the city.

The first phase of renovations is expected to take up to 18 months, and Chemours will reportedly take over temporary space in the Nemours Building next door until its open floor plan space located on floors four through 13 is available.

The remaining space, which could fit up to four tenants according to BPG, will be up for grabs in a submarket defined by elevated vacancy in that sector. According to recent data from CoStar Market Analytics, almost 15 percent of the 4 & 5-Star spaces in the Wilmington CBD submarket were unoccupied at the time of this trade. Less than 1 million square feet of office space has delivered here since 2000, and only one building over 100,000 square feet (the 160,000-square-foot AAA Building on River Place, fully leased) was over 90 percent occupied as of Q2-17.

In addition to the office component, the property will see overhauls of its hotel, retail and lobby spaces. Playing to the live-work-play concept dominating most major cities these days, the 40,000-square-foot retail plans involve 10,000 square feet dedicated to a planned food hall. The idea is to make both the office and apartments part of an 18-hour urban hot spot.

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