Delaware Developer Delle Donne Takes Delivery of $68M Construction Loan
By Matt Grossman May 22, 2019 10:56 am
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Delle Donne, a Delaware developer, snagged a $68 million construction loan from Capital One to build improvements at an office campus it controls in Wilmington, Del., the bank announced this morning.
The five-year adjustable-rate loan, made to a subsidiary of Delle Donne called Brandywine Investment Group II, will allow the developer to finance additional development at an office complex that’s partially occupied by drug maker AstraZeneca, off of Powder Mill Road a few miles north of Wilmington’s central business district.
AstraZeneca, a British company, chose Wilmington for its American headquarters in 1999 and owned its office park there, known as Avenue North, until 2017. That year, it transferred control of the 80-acre property to Delle Donne in a sale-leaseback transaction in which Delle Donne paid $50 million, according to the Delaware News Journal. Capital One financed that acquisition as well, the bank said. At the same time, AstraZeneca pared down its tenancy at the campus, leaving some office space vacant for new tenants.
The move coincided with a substantial downsizing for AstraZeneca in the state. In the mid-2000s, the company employed about 5,000 people in Delaware, but by 2016 it announced it would cut its workforce there to 1,500, dividing the layoffs among staff at its headquarters and workers at a manufacturing plant in nearby Newark, Del. Some research jobs were transferred to Gaithersburg, Md., according to the Philadelphia Inquirer.
Delle Donne has worked to fill the vacuum at the Wilmington site in part by signing two big new leases. Christiana Care, a hospital system, inked a deal late last year to take on 386,000 square feet in the office park. And Solenis, a company that makes chemicals for industrial processes, committed to take over a 110,000-square-foot building on the campus with move-in scheduled for January 2020.
“Delle Donne has taken a careful, methodical approach to developing Avenue North, which will include some exciting things in the future,” Capital One executive Jeff Wallace said in a statement. “As a result of this thoughtful approach they have attracted some of the premiere companies in the region to join them as tenants.”
Delle Donne will use the proceeds of the loan to build a nearly 1,400-spot parking garage on the campus as well as to make other tenant improvements. It will also use a portion of the funds to begin developing vacant land on the campus. The developer has big plans: Eventually, it aims to add 100,000 additional square feet of office space, 350 apartments, 150,000 square feet of retail space and a 200-room hotel.
“Capital One has worked closely with us at each stage of this multi-year project,” Ernest Delle Donne, the company’s chairman, said in prepared remarks. “The [bank’s] ability to structure a series of loans that support our strategy and the certainty of execution it provides have kept us on track.”
Regardless of the actual locations of their headquarters, corporations frequently choose to incorporate in Delaware because of the state’s business-friendly laws and tax regimes, and because Delaware state courts have extensive experience adjudicating corporate law. Around two-thirds of Fortune 500 companies are legally under Delaware’s jurisdiction, although most have only a negligible presence in the state. Nonetheless, companies such as chemical-maker DuPont, student-loan giant Navient and ILC Dover, an aerospace company, do maintain actual headquarters within Delaware’s state lines.
