NORTHEAST SNAPSHOT, DECEMBER 2008

Delaware Retail Marke

O’Hara

Delaware’s major retail development corridor is located along the Interstate 95 and Route 7 corridors, and along Route 273 in Christiana. This highly visible area is easily accessible from I-95, positioning the Christiana area as a destination shopping area for consumers throughout the Mid-Atlantic region. A majority of new strip and standalone retail construction is taking place here and in New Castle along the Route 13 and 40 corridor, and near areas with strong housing absorption. One such project, the planned Christiana Fashion Center, will add more than 1 million square feet of new space to the area.

Additionally, many of Christiana’s existing major retail centers are undergoing renovations and expansions. The highly successful Christiana Town Center — which features Boscov’s, JoAnn Fabrics, DSW Shoes, 5 Below, and a variety of new restaurants — is expanding. Along with the proposed development of The Marketplace at Christiana, these two projects will add 850,000 square feet to the immediate trade area in the next few years.

The Christiana Mall’s new development and renovations will bring new tenants to Delaware’s largest tax-free shopping region. This additional development around the mall area could ultimately total 1 million square feet. The new construction in the Christiana area is also giving some retailers an opportunity to make their Delaware debuts. Cosi, a casual restaurant chain, has recently added Delaware locations. Eastern Mountain Sports and Golf Galaxy have also leased space at the Center Pointe Plaza.

The trend in Northern New Castle County is toward new mixed-use development, where land is at a minimum and live/work/play communities will be most strongly received. The central part of the county is seeing a fair amount of new retail construction. The proposed New Castle Town Center would bring 524,000 square feet to the market. Kent and Sussex Counties also see continued growth. While new home construction has slowed, growth continues and new construction is occurring for both strip and big-box product. This would lead some to worry about an oversaturation of new retail product, but the Delaware retail market continues to see steady absorption, with vacancy rates currently in the mid-single digits.

In the Wilmington region, redevelopment has slowed, but some existing retail strip centers are still giving priority to additions and general improvements. Five new developments by Stoltz USA are currently being planned, including the redevelopment of the DuPont Barley Mill office site.

In Downtown Wilmington, Justison Landing has brought a renewed interest in the Riverfront area and is bringing new retailers to the area. The Riverfront Shops had some large retail vacancies that were recently absorbed by a back-room office user. A new Shop Rite is also currently under construction at Wilmington’s Christina Landing.

— Jim O’Hara, Jr., leads Jim O’Hara Realty, a division of NAI Emory Hill, based in New Castle, Delaware.

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