Commercial Real Estate News / Buying / Top Places to Buy Land in Delaware

Top Places to Buy Land in Delaware

Published: 09-11-24 Category: Buying

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Delaware, the second smallest state in the U.S. with just over 1 million residents within 2,489 square miles, still offers opportunities for both commercial and residential land investors.

Delaware's appealing corporate laws and its status as one of just five states with no state or general taxes draw commercial and business investors.

Over half of all NYSE-listed corporations and over 50% of Fortune 500 companies are legally incorporated within Delaware.

More recently, over 90% of American companies that went public in 2021 incorporated within The First State.

While the state has a slightly higher cost of living (11%) than the national average, its minimum wage is $4 more than the federal minimum and its neighbor Pennsylvania. Delaware is also highly ranked for its overall healthcare access and affordability.

Here, we'll explore the top places to buy land in Delaware, highlighting each location's unique advantages.

#1 – Wilmington and Surrounding Areas

Delaware's largest city, Wilmington, and its surrounding areas present prime opportunities for commercial real estate (CRE) land investments, especially in the financial sector.

In addition to being close to other major metro areas, including New York City, Philadelphia, and Baltimore, it's home to many of the corporate headquarters already mentioned, such as Dupont and Navient.

It also offers residents plenty of cultural amenities and healthcare facilities.

Land in Wilmington's suburbs, such as Hockessin and Greenville, is particularly valuable due to their upscale residential communities and excellent schools.

#2 – Coastal Sussex County

The Delaware Beaches, including Rehoboth Beach, Dewey Beach, and Bethany Beach, offer lucrative commercial and residential land purchase opportunities.

Vacationing families head to Lewes and Rehoboth Beach, while couples prefer the relative quiet of Bethany and Slaughter Beach.

While the most potential for investors lies in the beaches' popularity with tourists, real estate investors adding to their portfolios may profit from building new rental properties for vacationers with four-star budgets.

Inland areas of Sussex County, including Milton and Lewes, provide more affordable options while benefiting from their proximity to the coast.

#3 – Dover and Central Delaware

As the state capital, the City of Dover and its surrounding areas in Kent County present unique investment opportunities at lower prices than the northern and coastal regions of the state.

For those seeking business relationships with our military, the Dover Air Force base drives demand and provides a stable government presence.

Areas like Smyrna and Camden are experiencing growth and could be wise choices for long-term land investments.

For example, Smyrna announced a Downtown Development incentive program for new businesses, including permit and fee waivers, property tax reassessment waivers and reductions, utility rate discounts, and facade improvement grants.

#4 – Newark and University Area

Home to the University of Delaware and its famous Blue Hen mascot, Newark offers a dynamic environment for land investors, especially those considering projects such as the University's student housing needs.

Newark welcomes around 18,000 undergraduate students each year, plus faculty and support staff. It's also close to the I-95 corridor, the main north-south highway that runs from Miami, Florida, to the Maine/Canada border.

Newark is also home to growing tech and research sectors, which could be future customers for commercial builders who specialize in “clean” office buildings.

Surrounding areas like Pike Creek and Christiana also benefit from Newark's growth and could be prime locations for residential or mixed-use developments.

#5 – Western Sussex County

While often overlooked, Western Sussex County offers potential for agricultural and industrial land investments.

Due to its strong agricultural presence, this area may particularly appeal to commercial investors and buyers interested in industrial food processing development.

Newcomers are encouraged to join the county's Chamber of Commerce for networking opportunities.

Towns like Seaford and Laurel are working to revitalize their economies, which could lead to increased land values in the future.

For example, Seaford kicked off a $60 million property redevelopment earlier this year with plans to convert an obsolete shopping center into a community education center.

#6 – New Castle County Suburbs

The suburbs north of Wilmington in New Castle County offer land investors a balance of accessibility and space.

This county offers considerably more land availability than other city centers in Delaware. In addition, areas like Middletown have seen significant growth in recent years, making them attractive for residential and commercial land purchases.

More recently, federal American Rescue Plan Act (ARPA) funding is helping New Castle County support and welcome new business growth.

After you review these six possible destinations for a land purchase, you'll want to consider your plans for the land and how state regulations may affect them.

Due Diligence for Commercial Land Investors

Like other states, Delaware has varying restrictions on land use. Urban and suburban zones offer more flexibility for commercial developments, while rural areas are limited to agricultural or low-density residential use.

If you're considering land needing to be rezoned, it's worth asking the local business development office if your request could be expedited as encouragement to new investors.

Other considerations include:

Infrastructure and Utilities: The availability of water, sewer, electricity, and internet can significantly impact land value and development potential. Areas with established infrastructure generally command higher prices but usually offer easier development processes.
Economic Growth Projections: Regions with positive economic outlooks, such as those with incoming businesses or expanding industries, often see land values appreciate more quickly. However, if you're looking at a long-term investment project, areas in need of revitalization may offer incentives. Details of possible incentives, such as tax breaks and grants, are available from a city or town Business Development office.
Environmental Considerations: Delaware's coastal areas may face challenges related to flooding and sea-level rise due to the gradual impact of global warming. Inland properties may offer more stability in this regard.

Finally, proximity to major highways, airports, and public transportation can greatly enhance land value, especially for commercial investments.