While there is finally a light at the end of the COVID-19 tunnel, with promising vaccines from the labs of Moderna, Pfizer and AstraZeneca awaiting approval, the pandemic continues to ravage the U.S., and it’s hard to see any good that might come out of it.
Economically, the pandemic has been a nightmare for many industries. For others, like home delivery, digital marketing and cleaning services, it’s been an unforeseen boom for business.
Few would expect that mixed-use real estate — development that includes apartments, retail and office space — would be doing well right now. Buccini/Pollin Group (BPG), one of the most prolific developers in the city, has completed several projects during the pandemic, and, surprisingly, its lease rates have exceeded pre-pandemic projections.
“Overall, we have benefited by being a smaller city, so one of the things that’s been surprising to us since the pandemic began is that we’ve been growing,” Rob Buccini, co-president of BPG, told Technical.ly. “Through the pandemic, the public made a definite move toward smaller cities that are less dense like Wilmington.”
Another factor is a more recent development: “The Biden Effect.”
Since Joe Biden became the president-elect, Wilmington has become increasingly familiar to the average American.
“We’re on the cover of major newspaper, every major network broadcast, morning, noon and night,” Buccini said. “The positivity rate and hometown pride goes through the roof now.”
Buccini says that the appeal of Wilmington has gone up with the increase of what he calls “quality of life” amenities, such as restaurants, beer gardens and places to go (even if these amenities are currently restricted). BPG has focused on these types of projects in and around downtown Wilmington, as it’s behind projects like DECO, La Cavalier and the 76ers Fieldhouse.
"There was a trend of densification that occurred over the last decade, and that trend has certainly reversed itself. Now what we hear from the real estate companies is de-densification."
“People realize if you move to Wilmington you have all of the same benefits of a large city — cultural diversity, cultural institutions,” Buccini said. “But we didn’t have all the other things that people wanted in terms of quality of life, and we have those now.”
BPG’s biggest “pandemic project” was the 101 DuPont Place project: 198 apartment units inside the Dupont Building in downtown Wilmington, the same building as DECO, The Playhouse on Rodney Square and Chemours’ worldwide headquarters.
“Our leasing [for 101 DuPont Place] is ahead of our projections, and our projections were done in 2019, pre-COVID,” said Buccini.
Another 2020 project, 713 MKT, is a renovation of vacant buildings on the 700 block of Market Street, introducing 13 new studio and one-bedroom apartments and 5,000 square feet of retail space below. Since their completion in March, at the height of the pandemic, the property has been fully leased.
Ongoing is the Lower Market Street construction of 92 residential units on at The Cooper, as well as The Concord, near Concord Pike on Silverside Road (and just down the street from coworking space The Mill Concord), which will be anchored by the new headquarters of Marlette Funding.
None of BPG’s tenants have called to say that they are looking to downsize during the pandemic, Buccini said.
“The calls that we are getting now are, ‘We need to spread our employees out,'” he said. “There was a trend of densification that occurred over the last decade, and that trend has certainly reversed itself. Now what we hear from the real estate companies is de-densification.”
Simply put, due to the pandemic, businesses are looking for more office and commercial space, not less, as they plan to make their workspaces safe by giving employees more space. With an increase in work-from-home positions that will likely continue post-COVID, the demand for more space for in-office employees is keeping commercial real estate healthy.
“The question is, where will the balance be?” said Buccini. “We think de-densification will counterbalance work from home.”
BPG’s VP of residential operations, Christine Schontube, is confident.
“Navigating the pandemic takes a lot of cooperation and patience, but I couldn’t be prouder of the way our property management and leasing team have stepped up to the challenge,” she said. “Our resiliency during this unprecedented time shows that, as a company, we can successfully manage our growing portfolio and are prepared for whatever the future of the industry holds.”-30-