DuPont to sell Chestnut Run labs to Pa. developer
WILMINGTON – Just a few months after calling off its proposed sale to Delle Donne & Associates, DuPont has announced that it will sell its laboratories at its Chestnut Run headquarters to Pennsylvania-based developer MRA Group.
The privately held, regional real estate firm announced Tuesday morning that it has signed a letter of intent to acquire 800,000 square feet in about 13 laboratories for redevelopment into “Delaware’s premier innovation destination.” Terms of the sale weren’t disclosed.
DuPont will continue to host its headquarter offices on the northern edge of the property a few miles west of downtown Wilmington. It will also lease several lab buildings back from MRA Group following the conclusion of the sale, which is expected to close in the third quarter of 2021 after a due diligence period.
“After careful review, we are pleased to select MRA Group as the right strategic partner with the best vision and plan to redevelop the Chestnut Run Lab space for entrepreneurial and science-based innovation,” said Jay Valvo, vice president of facilities services and real estate at DuPont, in a statement announcing the sale.
In September, the COVID-19 pandemic appeared to have killed the deal between DuPont and Wilmington-based Delle Donne & Associates that was announced a year ago. The new deal virtually mirrors that left on the table, with DuPont always seeking to stay at the facility that has served as its headquarters off Route 141 since 2015.
The decision to sell part of its flagship campus came after DuPont conducted a review of facilities worldwide that found that the company had unused lab and office space in Wilmington after years of job cuts and spinoffs, and it resolved to consolidate to “a few essential buildings” at Chestnut Run, DuPont Chief Operations and Engineering Officer Daryl Roberts wrote to employees in 2019.
Then as now, the advanced materials company maintains that it looks “forward to creating a long-term presence where our employees use their time, talent and resources to improve our communities in Wilmington and the surrounding New Castle County.” DuPont spokesman Dan Turner confirmed that layoffs are not expected in conjunction with the campus’s sale and that the company will consolidate its lab teams to the leased facilities afterward.
MRA Group’s initial redevelopment plan envisions a multi-tenant, life science, chemistry, technology, and advanced materials campus at Chestnut Run. The 29-year-old firm has already built several such technology-focused campuses in and around Philadelphia, having converted an old AT&T/Bell Laboratory site into TEK Park and a former Rohm & Haas/Dow Chemical research and development site into Spring House Innovation Park.
MRA Group Executive Vice President Mike Wojewodka told Delaware Business Times that his firm is known for its adaptive reuse strategy, which tries to save as much of an existing structure and campus as possible while renovating it for a new, modern use. That strategy can also save time on redevelopment.
“We’ve always looked for the right opportunity to get involved in Wilmington,” Wojewodka said, noting brokers at JLL put the DuPont property on their radar. “Once we were made aware of it, we saw [Chestnut Run] as a great adaptive reuse to hopefully attract life science companies and advanced manufacturing-type companies to either stay in Delaware or relocate to Delaware.”
With Delaware facing a shortage of lab space for growing middle-stage startups and more mature companies, Wojewodka sees Chestnut Run as an obvious solution to building out the needed inventory. MRA would look to market the site to those companies to get a mix of sizes on the campus, which would still be anchored by neighboring multinational DuPont – a potential selling point for companies still looking to raise capital.
“We’ve been successful in creating those environments with a few other projects so we’re optimistic enough to think we can do it again,” said Wojewodka, who noted the firm wanted to move quickly despite the lingering impacts of the COVID-19 pandemic.
In a statement, Kurt Foreman, president and CEO of the state’s economic development agency, Delaware Prosperity Partnership, welcomed the opportunity to work with MRA Group.
“DPP is pleased that MRA Group is bringing its expertise, resources and passion to our state. Beginning with the iconic site at Chestnut Run, we look forward to seeing a multitude of innovative employers choosing Delaware for their growth plans,” he said.