United States -  Wilmington

The financial sector plays a critical role in the economic strength and stability of the Wilmington area. Notable financial institutions in the area include Capital One 360, Barclays Bank, M&T Bank, Wilmington Savings Fund Society, JPMorgan Chase, Bank of America, and HSBC Bank, among others; these entities maintain large office buildings in Downtown Wilmington. Although expected to retain the same economic impact, Bank of America is currently selling two buildings that the company only partially occupies. Delaware's pro-business finance laws created a very liberal tax and interest rate structure for banking and credit card institutions, particularly with the Financial Center Development Act of 1981. This industry has remained a cornerstone of the market. In the summer of 2015, JPMorgan Chase expanded its presence in Wilmington with the opening of its new Global Technology Center along the U.S. Route 202 corridor. With the opening of this new facility, an additional 1,800 jobs are anticipated to be created by 2019, which represents the largest hiring promise by a single company in the state in last 20 years.

The Wilmington area attracts a strong amount of demand associated with legal and government entities, a steady demand source for area hotels. The recent legislative changes surrounding patent lawsuits, which should require corporate lawyers and employees to travel to Wilmington, have also been considered in our analysis. While Bank of America is marketing its commercial buildings for sale, this financial institution has reiterated its commitment to Downtown Wilmington and is expected to remain a solid economic demand generator. Moreover, the continued growth and revitalization efforts along the Wilmington riverfront and the anticipated sports complex that is proposed in Wilmington should contribute to further growth within the leisure segment in the near term. Given the anticipated continued strengthening of the banking and legal sectors driven by the JPMorgan Chase expansion and the recent Supreme Court ruling related to patents, as well as increased visitation resulting from the revitalization efforts taken place at the Wilmington Riverfront, we expect moderate demand growth during the next several years.

While only two properties have entered the Downtown Wilmington area within the last several years (Westin Wilmington Riverfront and Residence Inn by Marriott), an additional three hotel projects (442 rooms) are proposed to open between 2019 and 2021. The additions of new supply and upgrading of existing supply should help support moderate RevPAR growth in the coming years, with values increasing accordingly.

Given the limited number of hotels in the market, no hotel transactions occurred in the Wilmington market in 2016. However, two sales occurred in 2017—the Hotel DuPont and the DoubleTree by Hilton Concord Pike; these hotels were both purchased by the Buccini/Pollin Group. Given the entrance of new supply in the market, hotel values are likely to be tempered by reduced RevPAR growth expectations when compared to prior years.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Wilmington RevPAR Change

Wilmington RevPAR

Year RevPAR
2007 64.74
2008 60.19
2009 48.08
2010 52.86
2011 58.33
2012 59.51
2013 62.20
2014 67.70
2015 67.69
2016 69.84
2017 70.08
2018 (f) 71.13
2019 (f) 72.56
2020 (f) 74.38

For more information, please contact:

Jerod Byrd, MAI
[email protected]
  • +1 901 481-3058 (w)