PNC Bank Center lands three new leases
WILMINGTON – In one of the more successful leasing months in the past year, the PNC Bank Center in the central business district recently closed three separate leases with prominent law firms totaling nearly 45,000 square feet.
The more than 273,000-square-foot Class A building at 222 Delaware Ave. was bought by Washington, D.C.-area real estate development firm Douglas Development in late 2019. The COVID-19 pandemic set in shortly thereafter, but Norman Jemal, managing principal of Douglas, told Delaware Business Times that the firm is starting to see interest return to the city.
“At the end of the day, companies want their people to be happy and thrive in the environment. So, when they’re out there, looking at their space needs, they’re looking at what best attracts and retains the best talent and that usually means being in a great facility,” he said.
The new leases include a quickly expanding Barnes & Thornburg, a full-service national business law firm providing legal advice in litigation, intellectual property, labor and employment, government services and finance, health care, real estate, environmental, corporate and restructuring and insolvency. The firm, led locally by Thomas McGonigle, signed a lease for the 12th floor totaling 24,180 square feet, and will leave its space at the Brandywine Building.
In a smaller footprint, international law firm Greenberg Traurig, an international law firm led locally by Diane Ibrahim, signed a lease for the 16th floor totaling 13,477 square feet. It will leave space at the Nemours Building.
Finally, Labaton Sucharow, a nationally known shareholder rights firm led locally by Ned Weinberger, signed a lease for the 15th floor totaling 5,970 square feet. It will leave space at the neighboring 300 Delaware Ave.
All three firms are expected to occupy their new office space during the second or third quarters of this year, officials said. They will join a collection of tenants at the PNC Bank Center that already leans heavily on law firms, with Wilson Sonsini Goodrich & Rosati, Eckert Seamans, Polsinelli, Fish & Richardson and Drinker, Biddle & Reath, already in the building.
Jemal told DBT that the building is now about 75% leased, up about 15 percentage points since they acquired it. Douglas Development has also been able to renew and extend some longtime tenants to keep its base intact.
While tenants have reportedly gained the advantage in the current leasing market as landlords seek to fill holes left in the wake of the pandemic, Jemal said he didn’t feel the pressure for the PNC Bank Center. His firm had proactively invested in some upgrades, including a new fitness center, conference center and upgrades to the main lobby, common areas and restrooms.”
“If you look at the overall vacancy within the market, much of the product is functionally obsolete. So, if you’re a world-class law firm – and many of these tenants are – you probably have just a few real truly viable options,” he said.
CBRE Senior Vice President John Kaczowka, who represented Douglas Development during the lease negotiations, agreed with that assessment.
“Demand from law firms continues to be strong as they seek to relocate from older outdated spaces to new, modern spaces that help attract and retain employees,” Kaczowka said in a statement.
Jemal said that he remains optimistic for the office market to begin heating up this year as companies decide on their back to office plans – or whether to further embrace remote working.
“You can’t create loyalty to an organization or develop relationships with people working remotely,” he said.
“We remain very keen on the future of the Delaware market,” he added, noting they were open to further potential acquisitions.