Brokers took a recent groundbreaking ceremony for additional office space at Mayfaire as a good sign for the local office market.
“It demonstrates that we have the absorption that requires more landlords to bring more buildings out of the ground,” said Cape Fear Commercial’s Spruill Thompson, who was one of more than 100 people who attended the event Nov. 9.
The last two of the six The Offices at Mayfaire buildings were completely leased, each by single tenants, before construction began, a feat that brokers say is highly unusual.
But demand for office space in general, particularly in the Landfall/ Mayfaire submarket, midtown and downtown Wilmington, remains healthy, and more new buildings are on the way.
Broker Steve Hall, a partner in Maus, Warwick, Matthews & Co., the leasing agent for The Offices at Mayfaire IV and V, is preparing to market the latest project by Offices at Mayfaire development firm SAMM Properties called Bradley Creek Station. The project will have more than 50,000 square feet of new class-A office space on the second and third floors with retail on the bottom.
Bradley Creek Station will replace aging structures in the 5800 block of Oleander Drive. SAMM Properties, which includes developers Steve Anderson and his son, Parker, unveiled a rendering of the potential design of Bradley Creek Station by architect Mark Loudermilk of Becker Morgan Group at the Mayfaire V and VI groundbreaking event.
While the larger tenants, such as banking software firm nCino, which has leased Mayfaire VI, and Wilmington Health, which has leased all of Mayfaire V, are not as common, many local and national tenants are searching for space in the 5,000- to 10,000-square-foot range and below, Hall said.
“There’s just not that much out there,” he said.
Projects like Bradley Creek Station and others Hall are working on, including two new buildings at Burnt Mill Office Park off Randall Parkway, are responding to that demand.
Hall said the Burnt Mill Office Park buildings are under construction, and the largest, with 11,000 square feet in a single story, is halfway leased with tenants The Hill School of Wilmington and IT group Global Process Automation.
“We wanted to give people in the office community who want some exposure, who want signage, the opportunity to have a walk-up storefront appeal with the design of the building,” Hall said.
He said the larger building, which is on Jaeckle Drive in the park and will be named the Jaeckle Building, could be fully leased by the end of the year. The smaller building, which will have 6,250 square feet in one story, will be called the Brailsford Building, half of which is expected to be occupied by a locally owned full-service restaurant.
The Burnt Mill Office Park spaces are for lease, while Bradley Creek Station spaces are for lease or sale.
“I think there’s a lot of office movement going on right now, a lot of people leasing and buying,” Hall said.
Cameron Properties Land Co. and Paramounte Engineering Inc. submitted site plans earlier this year for the first phase of a new midtown office complex. The developers hope to start construction on the Offices at Barclay sometime during the first of the year, said Hill Rogers, broker in charge of Wilmington-based Cameron Management.
The office building in the first phase would be nearly 63,000 square feet and the first parking deck nearly 159,000 square feet. The parking deck designs include pedestrian connections to the office buildings. The decks are expected to have more than 900 parking spaces when complete.
The new office park would be bordered by Dusty Miller Lane, Gallery Park Boulevard and Stone Crop Drive in The Pointe at Barclay, a dining and entertainment complex anchored by The Pointe 14 Stone Theatres movie theater.
Potential tenant interest is high because of the project’s location, Rogers said, but overall economic growth is also driving the demand.
“We’re growing but by how much – that’s a tenant-by-tenant situation. It seems to be that everybody you ask – pick an industry – is busy,” Rogers said.
Midtown is not the only primary office market where new inventory is on the way. Recent Military Cutoff Road proposals for mixed-use projects all include potential office space.
In one of the most recent, Tribute Companies has submitted conditional district rezoning requests to the city of Wilmington for projects not far from each other on Military Cutoff called Arboretum West and Arboretum Village. Arboretum West could have up to 10,000 square feet of office space, while Arboretum Village could have up to 3,000 square feet for potential office tenants.
With new projects on the way, supply doesn’t appear to be exceeding demand, brokers say. For nCino, which grew its fiscal year revenue by 562 percent between 2013 and 2016, new space was critical for a workforce that has expanded from 150 to more than 400 in about two years.
By the end of next year, in addition to its The Offices at Mayfaire space, the Live Oak Bank spinoff will occupy all of the 90,000-square-foot office building at 6770 Parker Farm Drive.
Wilmington Health’s lease of the 30,000 square feet in The Offices at Mayfaire V also represents growth in the Mayfaire area, where the health care provider already had some office space.
“The office we have here today … our patients love it, our providers love it, our staff love it … We’re going to be able to expand what we have in this market for the patients in this market and bring more physicians … to the patients in the community where they are instead of making them drive wherever is convenient for us,” Wilmington Health COO Chris Bunch said during the Nov. 9 The Offices at Mayfaire event.
Although some predict the economy in general is due for a slowdown, something that could impact the need for office space everywhere, others are more optimistic.
The Offices at Mayfaire development team was able to fill up The Offices at Mayfaire I “in the darkest days,” Steve Anderson said. “We were then able, during the iffy times, to go over and start Mayfaire II, and that kicked us off to be able to do III and IV, all in about a 10-month timeframe.”