WilmingtonBiz Magazine

Commercial Real Estate Trends To Watch

By Cece Nunn, posted Apr 4, 2024
The local commercial real estate industry continues to follow some of the same trends this year as it did last year. Gas station brands new to the Wilmington area made progress toward welcoming customers, with some under construction and others moving forward in the local planning and permitting pipelines. The office, industrial and retail sectors forged ahead, in some cases diverging from the performance of those sectors in outside markets.
Gas Guzzling

Gas station developers advanced plans to bring popular players to the Wilmington area’s offerings.

Wawa and Sheetz have new locations in the works on Carolina Beach Road. The chains, which are both Pennsylvania based, confirmed plans to enter the Wilmington market in the last year. Now, planning is underway for two new stores. A Sheetz is proposed at 6401 Carolina Beach Road, and developers have been working on a Wawa about a mile south at 6800 Carolina Beach Road. 

A 6,100-square-foot Sheetz convenience store is proposed at the intersection of Carolina Beach and Golden roads. Site plans show a fuel canopy with eight fuel pumps, 42 parking spots and access driveways off Carolina Beach and Golden roads.

Another Wawa is on the way to South 17th Street near Novant Health New Hanover Regional Medical Center. Sheetz and Wawa are among several new convenience store chains breaking into the Wilmington market. Others include 7-Eleven, Royal Farms and Refuel, which announced its first store inside Wilmington’s city limits in October 2023.
Office Dichotomy

The national office vacancy rate set a new record during the last quarter of 2023, according to Moody’s Analytics.

According to Moody’s, the nearly 20% national rate reflects an ongoing mix of remote and in-person working. “The permanence of dynamic hybrid models has effectively muted office demand,” Moody’s reported in January 2024.

But in the Wilmington market alone, the vacancy rate is minuscule, according to market data and local brokers. An office building coming to midtown serves as an example. N.C. Farm Bureau Mutual Insurance Co. will move its office in Hanover Center off Independence Boulevard to The Offices at Iron Gate at 2725 Iron Gate Drive, which is under development by Wilmington-based SAMM Properties Inc.

Parker Anderson, of SAMM Properties, said in February, “With not having started construction yet on The Offices at Iron Gate and having the potential for the entire building to be leased before construction begins, I think that is a great testament to the high demand for class-A office space in Wilmington.”
Industrial Development

Developers bought 187 acres on U.S. 421 in Wilmington in October for a major expansion of one of their existing industrial projects.

Edgewater Ventures, a commercial real estate investment company, purchased the property next to Wilmington Trade Center for $7.65 million from Invista.

“The acquisition will expand Wilmington Trade Center to 212 acres and is master planned to provide up to 3.3 million square feet of class-A industrial facilities,” a news release stated. “The park will be one of the largest of its kind in the state of North Carolina and is designed to accommodate industrial users up to 1 million square feet.”

Like the office market, the industrial sector in the area continues to see low vacancy rates.
At Wilmington Trade Center, Edgewater has already developed and nearly filled two buildings totaling 315,000 square feet on the original 25-acre parcel acquired in 2021.
Retail Growth

National retailers put Wilmington on their lists in 2023, with businesses coming and going at bustling centers.

A second Wilmington Target store is coming to The Village at Myrtle Grove. Office supply store Staples, which anchored the shopping center alongside The Home Depot, closed its doors in July.

Commercial brokers told the Greater Wilmington Business Journal earlier this year that the national retailer had been considering entering the Monkey Junction market for more than a decade.

Across town, more changes are in store for Hanover Center, Wilmington’s first suburban shopping center, which was built in 1955. At the end of September, retailer Homesense opened in a 24,000-square-foot section of the storefront once occupied by Stein Mart at Hanover Center.

At Mayfaire Town Center, clothing and accessory retailer Anthropologie opened in the space formerly occupied by Pier 1.
Prescribed Development

Health care organizations in the Cape Fear region continue to expand with recent openings and planned projects.

“As the supply of existing medical spaces remains limited, the demand for the newly developed properties should remain healthy,” said Cal Morgan, a real estate appraiser and owner of Wilmington-based JC Morgan Co. “As new residential developments expand outward from central Wilmington, development of such medical facilities should follow.”

In June, officials marked the opening of a 34,000-square-foot medical office building at the Novant Health Brunswick Medical Center campus in Bolivia. The two-story building houses heart and vascular services, family medicine, urology, surgical care and an infusion center. 

In the city of Wilmington, a $28 million project will allow MedNorth Health Center, 925 N. Fourth St., to expand access to existing and new services including family medicine, pediatrics, obstetrics, gynecology, dentistry, podiatry, integrated behavioral health and more. The new construction is slated to add about 30,000 square feet.
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