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Velocity Venture Partners Expands into Delaware's Industrial Market
Velocity Venture Partners has officially made its first acquisition in Delaware, bringing innovation to the real estate game by repurposing office space into industrial-use properties. The Bala Cynwyd-based firm purchased two buildings totaling 78,852 square feet from Wilmington University for $6 million.
These buildings, situated at 31 and 47 Reads Way in New Castle near Wilmington Airport, have transitioned from educational to industrial uses. Following the sale, Wilmington University retained a short-term lease on part of the property, confirming ongoing educational needs even as Velocity prepares for more transformative changes.
Transforming Office to Support Industrial Demand
Velocity aims to capitalize on the growing demand for industrial spaces, especially as office occupancy rates continue to wane. With plans to spend $2.8 million on renovations, the firm will restore the buildings to their original industrial state while also benefiting from enhancements made during their time as office spaces.
“The demand is on the industrial side more so than on the office side,” says Tony Grelli, the founding partner at Velocity. He highlights how the original industrial infrastructure, including loading docks, will simplify the conversion process, making this project an attractive opportunity in the current market.
A Beacon for Future Industrial Tenants
Targeting tenants who require between 5,000 and 25,000 square feet for operations like distribution and manufacturing, Velocity is keen on positioning these properties to meet the needs of today's businesses. Notably, the buildings have significant attributes, such as high ceilings and extensive loading docks, that appeal to industrial tenants.
Impact of Regional Trends on Velocity’s Strategy
This strategic purchase in Delaware represents Velocity’s broader trend of tapping into regional industrial markets. The firm, which already maintains an extensive portfolio in Pennsylvania and New Jersey, anticipates pushing its operational boundaries further as they identify additional opportunities for revamping underperforming assets.
Navigating Challenges and Future Prospects
Investing in industrial properties, particularly those needing significant upgrades, requires balancing renovation costs against the potential return on investment. Grelli emphasizes this strategic calculation; as office spaces decline in value, the potential for revitalizing them into industrial hubs offers exciting new avenues for growth. As he notes, “Something has to happen with the real estate,” prompting Velocity to seize this moment.
As we look forward, the shape of Delaware’s industrial landscape may be poised to shift dramatically, with Velocity at the forefront of this evolution.
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