Brokers and developers who watch the demand for office space in Wilmington say there are reasons to be “cautiously optimistic” about the market here.

“I think from the time that the recession was over with for Wilmington, which was several years later than the regular market, that we have steadily seen some absorption out there in the marketplace, and that’s across the board too,” said Don Harley, broker and partner of Coldwell Banker Commercial SunCoast.

Harley said several new office buildings are in the works in Wilmington – the fifth and sixth buildings in the Mayfaire Office Park, Renaissance II off Military Cutoff Road, a new building at Burnt Mill Business Park on Randall Parkway and an office component in the planned mixed-use project called Arbor Commons off 17th Street South. He said Wilmington has eight existing buildings that can offer 10,000 square feet or more of contiguous office space.

In a lot of cases, office developers in the area tend to wait until they have tenants on board before construction begins

“Our tolerance for risk is low so we don’t plan on building Renaissance II speculatively. We believe our site is arguably the best site in the Landfall-Mayfaire submarket and we like our position as being fully permitted and ready, willing and able to go vertical with a lead tenant, similar to what we did with Dungannon Village at Autumn Hall,” said Brian Eckel, partner in GHK Cape Fear Development and Cape Fear Commercial. “Tenants and users are becoming more aware of their occupancy timelines, and we believe it’s just a matter of time before the right tenant chooses to move forward with Renaissance II. The building is a mirror image of the Morgan Stanley building, which we have managed for the last decade and remains 100 percent occupied.”

The Autumn Hall building is a two-story, more than 24,000-squarefoot building expected to be done by April. Coldwell Banker Sea Coast Advantage will occupy 18,000 square feet.

Like Harley and other brokers, Eckel said he hopes demand for new space will continue.

“There are certainly a lot of positive signs that hold a lot of potential, but I would qualify our outlook as cautiously optimistic,” he said.

Although in a healthy state at the moment, “the Wilmington office market has proven to be a fragile market over the last decade,” Eckel said. “This weakness was exposed with the financial crisis and the loss of some key tenants in our market. It’s been a bit of one step forward and a half a step backwards in our recovery as new product comes on line.”

When it comes to the next Mayfaire office buildings, the partnership involved also has never
been a spec development company, said Steve Anderson, one of the partners.

“We’ve got a certain percentage that we want to be able to hit, whether it’s sell or lease,” Anderson said. “We will wait [to begin construction] until we have that percentage committed.”

But that doesn’t mean waiting to get the necessary approvals. “Even for a community like Mayfaire that all the infrastructure’s already in . . . you still have that five- to six-month permitting process that you have to go through, minimum,” Anderson said.

With several tenants already signed up, The Offices at Mayfaire IV is expected to be finished by April or May. Anderson said his clients are often existing Wilmington companies that are either consolidating multiple offices or expanding.

“I do see continued growth here in this market, and it’s coming from growth within the companies to where they’re just literally out of space,” he said.

The developers of Burnt Mill Business Park hope to break ground in late spring or early summer on new office space, but are also waiting on some tenant commitments, said Steve Hall, broker with Maus, Warwick, Matthews & Company.

“There is a lot of movement in the office market and more first generation space coming out of the ground than ever before. Being office and retail are the two areas where I mainly focus on, I am really excited about the future opportunities coming online and what they have to offer,” Hall said. “At [Burnt Mill], we are really excited about these two buildings, and if all works out accordingly then we will only have two small office areas left to be leased out.”

In addition to the growth of existing companies, Wilmington is also luring different kinds of companies than the city has seen before, including tech firms, Harley said.

“I think that the way Wilmington’s image is now and the growth of it is attracting people of a younger generation,” Harley said. “They want a different type of office space than we’ve seen before.”

Allan Fox, another broker with Coldwell Banker Commercial SunCoast, said changing attitudes toward the workplace help boost demand for offices in places like Wilmington.

“People nowadays can work just about anywhere so they put the quality of life in the forefront. They don’t want to necessarily be tied down to where they work; they want to work where they want to live,” Fox said.