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Real Estate - Commercial

Downtown Market Report: Targeting Tech Businesses Over Bars

By JP Finlay, posted Apr 1, 2011

As downtown Wilmington continues to find its identity, efforts are under way to shift from a bustling bar scene to a buzzing tech sector.

“We don’t want a whole lot more exposure to the restaurant and service industry,” said John Hinnant, executive director at Wilmington Downtown Inc.

WDI is focused on bringing science and technology jobs to downtown, he said. In 2007, downtown housed about 300 tech-sector jobs. By last year, that number had skyrocketed to more than 2,000.

“[The technology] industry networks. We think it’s a situation where other companies will come downtown because their peers are downtown,” Hinnant said.

According to the 2011 Book of Lists, PPD employs 1,500 people, accounting for roughly 75 percent of the tech-sector job growth, though other companies made the move downtown as well. Hinnant said that PPD can serve as an incubator for other tech companies downtown.

“We have to keep targeting that niche and that market,” Hinnant said.

Inclinix, a company that specializes in customized Phase I-IV clinical trial enrollment solutions for global pharmaceutical, biotechnology and medical device organizations, moved to the Self-Help Building located at 272 N. Front St. to occupy the top two floors.

“We went from 30 offices with no windows to an office with views of the river,” said Tobin Geatz, CEO of Inclinix. “I’m really confident that it’s going to help our business.”

The move coincides with the company’s shift away from operating an on-site call center to a virtual operation where call center workers work from home. Since the company’s business is project-based, the number of call center employees fluctuates from about 10 to 50. This shift to a home-based model improves the quality of service, Geatz said.

The downtown office space, which is about 8,700 square feet, will house the technology hub and the company’s managers, he said.

“But, it wasn’t about space. It was about value and employee productivity and an upscale image for our company,” he said.

“Downtown Wilmington, when it’s clean and rocking, feels like so many European places. Downtown has character.”

Hinnant plans to continue trying to bring the tech sector to downtown Wilmington.

“We’re going to poach everybody in the region. We want to target the Triangle,” Hinnant said. Moving to Wilmington can be sold by highlighting the urban lifestyle of downtown with the close proximity to beaches.

“I’m all for that. The more offices we have down there the more people can support the downtown business environment,” said Mayor Bill Saffo.

Office space remains ample downtown. Newer buildings like the Bank of America building on Third Street have whole floors sitting empty, and older buildings up and down Front Street advertise space for lease in vacant windows.

The numbers are trending in the right direction though. According to WDI data, in 2009 Class A office space like the Bank of America or Wachovia buildings sat at 78 percent occupied. Last year, that occupancy moved up to 80 percent.

Class B office space - facilities without the most modern amenities, typically seen above retail shops on first floors and in more dated buildings - experience slightly higher occupancy rates. In 2009, Class B space was 80 percent full, and by 2010 that figure moved to 83 percent.

“What you’re going to see is Class B is priced to move. We want to activate the second and third floor [above retail],” Hinnant said.

A recent example is the sale of the old Kingoff’s Jewelers building at 10 N. Front St. The 4,000 square foot building was purchased for $450,000 by a tech company, Frank Deals, to house offices on the second floor. The first floor will be renovated to house the jewelry store F.I.F.I. and a Rita’s Water Ice franchise -three new downtown businesses, none serving alcohol.

“We’d like to see more office space taken down there. The space above the old buildings can be converted. The more that happens the better off we all are, especially the retail and restaurants downtown,” Saffo said.

“I think we’ll have more and more of it,” he said.

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