WILMINGTON — When you walk in Wilmington’s business district, it seems you can’t go ten steps without seeing construction outside of a high-rise building or cranes towering in the distance.
The project on the corner of Market and West Streets often has construction workers outside just beyond a fence that has a proud banner which states that it’s another project led by
the Buccini/Pollin Group. Meanwhile, inside the 14-story Nemours Building, one of two buildings built and occupied by DuPont and its army of corporate employees with floors of offices decades ago, desks and cubicles are being transformed into apartment units.
For Wilmington, the corporate capital of the world, the project could serve as a symbol of the future where long-empty office and retail space in Delaware’s largest city become attractive apartments to draw in scores of young professionals. But for BPG President Chris Buccini, it also serves as a milestone for how far the firm has come — and how much its portfolio has grown.
By the time BPG acquired the Nemours and Brandywine buildings in 1999, Wilmington had not seen a new apartment structure built in years and the city’s large titans in finance had been reconfiguring their office spaces. DuPont was also moving its operations to the suburbs, leaving lawyers and bankers as those most likely to come into the office.
[caption id="attachment_467488" align="alignleft" width="300"]
The DuPont Building and Nemours Building occupies the entire city block facing West 10th, 11th, and Orange Streets, with the DuPont building being built in stages until 1923. For close to a century, the 13-story high rise was used as the company’s headquarters until it moved to the suburbs. | PHOTO COURTESY OF BUCCINI/POLLIN GROUP[/caption]
“2024 marks the year we finally got the Nemours building right,” Buccini said with a laugh. “We acquired the building 25 years ago and we invested a lot of capital to renovate it from a headquarters, and along the way, we’ve found that this is a highly desirable place to live. We never thought this area would become a thriving residential location.”
When Wilmington’s office buildings became more vacant over the years, developers had to become more creative in how to maximize its use and attract tenants. That creative thought, combined with the renewed energy around smaller cities like Wilmington, has led to the repurposing of towering office complexes and forgotten shops now waiting to be turned into something new.
When BPG finished its contracted 85 apartments in the Nemours Building by 2000, the tide began to change. All those apartments were leased within a month and a half. But even then, there were still some struggles in leasing out apartments over the years, that is until the COVID-19 pandemic changed everything. More people were staying at home in increasing numbers and when the world opened again, they wanted to shop, eat and gather.
“I like to tell people Wilmington is a 30-year overnight success. We’ve been sprinting ever since,” Buccini said. “Quite frankly, the foundations were already here in Wilmington, but COVID was this incredible accelerator that it wasn’t just people moving downtown, it’s the people who started going out downtown and going to the restaurants and other entertainment options downtown. We went from being a 9-to-5 town to seeing people on nights and weekends.”
Making the math work
Two blocks away from the construction at the
Market West campus, is a block of historic buildings on Ninth and Tatnall Streets, some of the buildings retaining its classic red bricks and bay windows. Back in 2018, it was an abandoned block in a historic part of the city as former shops like the Bag & Baggage, Gewehr Piano and a jewelry store had long been closed.
Today, that same block is home to a beauty salon, Girard Craft and Cork, a pop-up Christmas themed bar, WhyFly internet provider and a marketing firm - all redeveloped by
9th Street Development Company. With newer mixed-use concepts in mind, the block also now has 37 second floor apartments combined amongst the buildings with most of those units leased.
The entire block was 9th Street Development’s first project after the block was foreclosed on and, according to founder Robert Herrera, it was years of hard lessons.
“In the demolition, it was just surprise after surprise, problem after problem,” he said. “We found out that there was a fire at 226 W. Ninth Street and it just went up the center of the building. By the end of the day, me and my partner were just on-site directing contractors because it became such a mess.”
Herrera points out that the Ninth Street block would not work with the backing from Delaware historic tax credits which could offer up to 30% tax credits for approved projects, a 20% federal historic tax credit or other incentives through the Downtown Development District.
“If you stack them up, then it just barely works. But it’s a lot of work. If you’re just building, you can go ahead and make the money, but if you’re going after these credits, it’s a lot of legal and paperwork to get it just over the line,” he said.
Making the math work when it comes to converting some of Wilmington’s older office and commercial space is typically one of the largest barriers. Developers and real estate brokers consider each building’s floor plate and how much leasable space needs to be converted into bathrooms, kitchens and the utilities needed for functionality.
“It’s all building dependent. We’ve had some clients come that are not even feasible to make it work and it doesn't pass a lot here in Wilmington,” Newmark Senior Managing Director Wills Elliman said. “That against the rental market here; it’s tough for some of these projects to pencil out. The typical projects you see going this route are Class C, older buildings and, because there’s a lot of unknowns, sometimes it’s easier to tear it down and rebuild.”
When the math does not work, developers like
Johnson Commercial Real Estate (JCRE) have chosen to stay the course but to offer high-class amenities to anchor office tenants that may be considering newer office space out in the suburbs. At 1313 N. Market St., formerly known as
Hercules Plaza, each floor is roughly 40,000 square feet in size and primarily leased out to law firms. To date, 60% of its available office space has been leased out.
JCRE owner Scott Johnson said there were many studies on turning 1313 N. Market Street into an apartment complex, but the results showed that apartments would have averaged 2,200 square feet,which would be well beyond the average size of a unit on the market.
“You’re just not going to get the rents to support the extra expenditure needed to make it work,” Johnson said. “You need to get the density to satisfy the type of units you’re looking for.”
Instead, 1313 N. Market St. has focused on becoming an eat-work-play concept, with the Chancery Food Hall offering dining options to those in the offices and nearby businesses. It’s so popular that people often stay for happy hour while others host special events in the space like New Castle County Executive Matt Meyer who hosted his primary election watch party there in September. Other features include an independent movie theater, a game room and event space that has since booked unique opportunities like improv shows.
“Everyone’s still figuring their way back into the office, and we’ve really found that people really want to gather for events and network,” Johnson said.
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BPG's first project with 101 dupont place taught them many lessons with converting former DuPont headquarters into apartments. | DBT PHOTO BY KATIE TABELING[/caption]
Turning old buildings into something fresh
BPG was not immune to those market forces either. The company had to rely on city programs like the 10-year tax abatement program, historic credits and a 50% match on the American Disabilities Act improvements for some projects because it was the only way the financials could work.
When the developer converted the former Delaware Trust building at 900 N. Market St. into apartments in 2003, Buccini said it was the hardest thing they had ever done.
“Wilmington has this historic architecture that you can’t afford to recreate. We wanted to be very authentic and stay true to that, and some of these buildings had literally not been touched in decades,” he said. “With the investment you need to make on ADA accessibility and sprinklers, some of the buildings are worthless, because it’s so expensive to make it work.”
Despite those headwinds, BPG formed a strategy to invest in pockets downtown as an entertainment center. Right before the pandemic started, the developer drew Chef Tyler Akin to open the French brasserie Le Cavalier at the Hotel du Pont. Over the years, BPG attracted Bardea Food & Drink and later opened a boutique hotel down the block. Eventually, 900 N. Market Street was rebranded and now features a bowling alley, just feet away from local restaurants and the Grand Opera House.
“Even though restaurants are expensive, it was an important seed to be planted. It's always amazing when the JP Morgans of the world expand and bring people to Delaware, but bringing an incredible chef is just as important to a city’s renaissance. That’s what’s bringing people wanting to live here," Buccini said.
In a sense, the $500 million planned investment in Market West could be the final proof of that theory. That plan includes a mixed-use campus developed with the DuPont, Nemours and Brandywine buildings, complete with a courtyard bridging the Nemours and Brandywine buildings. Inside the Nemours building will be 355 luxury apartments while expanding
the Mill co-working space and adding a new upscale restaurant.
BPG has already completed the $100 million redevelopment phase and 250 apartments will be on the market by December. There are four more floors set to be renovated.
“What we found from 101 dupont and everything else around it is that this is a highly thriving residential location. We’re leasing every single week for Market West,” Buccini said.
