NEW CASTLE — Wilmington University sold its Wilson Graduate center at New Castle Corporate Commons to Velocity Venture Partners, marking the first acquisition the firm has made in Delaware.
The $6 million sale included two buildings, located at 31 and 47 Reads Way and totaling 78,852 square feet in space. The deal breaks down to $76.09 per square foot.
JLL represented Velocity in the acquisition and JLL’s Jamie Vari and Blaise Fletcher are handling leasing for the buildings. DSM Commercial represented Wilmington University in the sale.
Wilmington University signed a short-term lease for 47 Reads Way. In the meantime, Velocity Venture Partners will start renovations to attract new tenants. The Bala Cynwyd-based firm said that negotiations are underway with a medical device distributor for 15,000 square feet of space with much of their space used for warehousing.
“For all intents and purposes, it’s fully vacant. So, it’s a clean slate and empty canvas,” Velocity Founding Partner Tony Grelli said. “We’re trying to target users in the 5,000 to 50,000 square foot range, so ideally, it can have two to 12 [tenants].”
Velocity Venture Partners started in 2017 by focusing on industrial real estate in the Philadelphia market and has since bought 10 million square feet of real estate and owns 8 million square feet. Up until this acquisition, Velocity Ventures’ assets were in Pennsylvania and New Jersey, and many of its properties hold tenants that need smaller spaces.
Grelli told the Delaware Business Times that the firm got into its niche right when e-commerce was becoming “real” in terms of warehouse needs, and the COVID-19 pandemic pushed people to stay at home and order goods online.
“That onshoring of manufacturing and distribution has been a huge driver for industrial [ space] so we marry it up in an environment where nobody, for the most part, is building the smaller units for the tenants we focus on,” he said. “Most of the industrial developers out there want to build the biggest site possible for the fewest number of tenants because it’s an economy of scale game.”
There’s also the cost of building smaller units that makes it cost-prohibitive to start from the ground up, Grelli said, and a need to duplicate everything, from bathrooms to entrances – which is why the two buildings in the New Castle Corporate Commons are so unique.
The buildings were constructed in the 1980s for industrial use and Wilmington University leased them out in 2004 and converted them for graduate courses as well as office space.
Wilmington University representatives told DBT that when the institution transitioned to virtual learning during the pandemic, most graduate students chose to continue studying online. Those offices have since moved to WilmU’s New Castle and Brandywine locations.
While this is the first Delaware project for Velocity Ventures, Grelli told DBT that the plan is to do what they do best and stay in their own backyards.
“It’s a new state, but at the end of the day, it’s a 30-minute drive from where I grew up in southern New Jersey,” he said. “The game plan is to stay local and find great spaces for tenants that aren’t served by any of the new class [of space].”
