Delaware, on the Eastern Seaboard of the United States, is one of the five Middle Atlantic States. At a mere 2,491 square miles, it is the smallest of the Mid-Atlantic States, and the second smallest state in country. There are almost 800,000 people in this tiny state - about 400 per square mile. Delaware is a relatively wealthy state, with an average per capita income of about $34,000 - 9th in the nation. Delaware's economy is quite varied, with the largest employers spread across several different industries: government; chemical and pharmaceutical; banking; automotive manufacturing; and agriculture. Delaware is famous for its permissive corporate laws so many large national and international companies are headquartered there. Wilmington Trust, First USA / Bank One / JPMorgan Chase, AIG, Citigroup, Deutsche Bank, ING, DuPont and AstraZeneca are all located or headquartered there. The U.S. military also has a large presence in Delaware, which is home to Dover Air Force base, one of the largest Air Force bases in the country.


What does this mean for the commercial real estate market in Delaware? Office space is at a premium. The office market in Delaware is steady and strong. Rents are high and vacancies are low. Delaware's industrial market is strong as well, on account of the Port of Wilmington and the major auto manufacturing plants. As opposed to other markets, Delaware's market seems to divide pretty clearly between office and industrial uses; the economic sectors in the state tend to be either purely office or purely industrial with not much use for flex space. Retail property is fairly inexpensive, particularly in Geoergetown, in the south.

The housing market is still strong in Delaware, with supply meeting demand. Buyers waiting for prices to drop may be waiting a long time for prices to drop because demand is so steady and the market wasn't really fueled by speculation in the first place. Rather, Delaware's housing market is driven by people looking for affordable housing in the Boston-DC corridor. There is some room for investment and speculation in urban revitalization, particularly in Wilmington where there is a demand for afforable multifamily housing. It's estimated the state has a need for at least 12,000 units of affordable housing.

There is also some new development along the Delaware coast, particularly of luxury condos and resorts. In fact, in Sussex County there is still undeveloped beach front acerage available. Vacant beachfront property is currently going for about $150,000 to $300,000 per lot.