WILMINGTON – Another downtown high-rise has been sold, continuing the string of investment in the city, as Amtrak has acquired The Renaissance Centre on North King Street. Amtrak intends to occupy the currently 70,000 square ...
[caption id="attachment_199459" align="aligncenter" width="726"]Amtrak has purchased the Renaissance Centre off King Street, where it will reportedly staff upward of 200 employees. | PHOTO COURTESY OF JLL[/caption]
WILMINGTON – Another downtown high-rise has been sold, continuing the string of investment in the city, as Amtrak has acquired The Renaissance Centre on North King Street.Amtrak intends to occupy the currently 70,000 square feet of vacant space in the building, employing upward of 200 people there. The building is just minutes from Joseph R. Biden Wilmington Train Station to the south.When asked by Delaware Business Times about the purchase, Amtrak's future plans for current Wilmington-based employees, and whether it would be leaving any other leases or hiring new employees, an Amtrak spokeswoman declined to answer, providing only a short statement confirming the acquisition.“This purchase is part of Amtrak’s long-term strategy to reduce costs by having employees work out of owned property,” the rail service stated.The taxpayer-backed company has tried to curb its operating losses in recent years, finishing fiscal year 2019 with a loss of nearly $30 million, a better finish than the previous year which saw a loss of more than $170 million. A consolidation of its office workers just a short walk from the Wilmington station could help it save long term on its real estate costs. Amtrak is currently listing five jobs online in Wilmington and employs about 1,200 in the state at the Wilmington station, two maintenance shops and offices.Last renovated in 2007, The Renaissance Centre includes 155,000 square feet of Class A office space and a 190-space parking facility. Amtrak has occupied about 9,000 square feet of the building for more than a decade, according to county land records.Other tenants include the Delaware Supreme Court, the Delaware State Bar Association, the global accounting firm Deloitte, the marketing agnecy Foundry 9, the local ABC affiliate WPVI-TV, and a number of law firms, including McCarter & English, Potter Anderson, Simmons Hanly Conroy, and Whiteford Taylor.The seller was The Commonwealth Group, a Wilmington-based real estate development and management firm that has owned the building since 2004. A sale price was not disclosed, and county land records reflect only a nominal $1 payment.Under its charter from Congress, Amtrak is exempt from personal and real property taxes. That means it does not have to pay Delaware’s real estate transfer tax, limiting the public’s ability to determine the building’s sale value.JLL Executive Vice President Jamie Vari, who facilitated the sale with associate broker Cindy Fleming, said the investment takes 4% of available office space off the Wilmington Central Business District (CBD) market. It’s a positive trend after the city saw upward of 25% of its CBD vacant last year after huge buildings went dark.
[caption id="attachment_188232" align="alignright" width="434"] The Pennsylvania Railroad Building recently purchased by CSC | PHOTO BY JACOB OWENS[/caption]
It’s not the only recent sale in the immediate area of the Amtrak station that sees more than 700,000 riders a year. In 2020 alone, CSC purchased the Pennsylvania Railroad Building for an estimated $4.8 million while New Jersey-based insurance agency Farmers of Salem purchased 1 Avenue of the Arts for more than $4.3 million.“Having another major employer like Amtrak commit to its long-term presence in the CBD is great news for the Wilmington market,” Vari said in a statement announcing the sale. “We believe we’ll see this owner-occupier trend continue due to lease accounting law changes on the horizon, along with the relatively low cost of real estate in Wilmington when compared to neighboring Interstate 95 corridor cities.”Vari told DBT that Wilmington has seen steady vacancy rates for Class A space, or the newest, most-desired offices, around 16% in recent months. With average rents between $26 and $27 per square foot, the area is competitively priced compared to surrounding markets such as downtown Philadelphia, the Lehigh Valley and the Navy Yard, where asking rents reach up to $44 per square foot. "I see this as an opportunity for Wilmington to attract investors looking for affordable, trophy spaces," he said. "While we can’t predict the future of the Wilmington market, there's reason to be optimistic when looking at recent transactions."Sen. Tom Carper (D-Del.), who commutes to and from Washington, D.C., via Amtrak almost every day, heralded the news that the service was investing in Delaware.“We are home to a strong Amtrak workforce here in Delaware, and it is welcome news that Amtrak will build on its presence in downtown Wilmington,” he said in a statement. “I’ve long supported Amtrak and passenger rail, and this is a win-win for Wilmington.”By Jacob Owensjowens@delawarebusinesstimes.com