STAMFORD, CT—There was some great news in the office market in Fairfield County in the second quarter, which was negated somewhat by some bad news. The office market saw a number of significant lease transactions, but also suffered a number of large space givebacks by area corporations.
In its second quarter office market report, brokerage firm Colliers International reports the market was bolstered by large transactions in the technology, hospitality, healthcare, and media sectors. However, large space givebacks muted the effect of those transactions. In fact, Colliers states that the Fairfield County market posted a negative 425,892 square feet of absorption as compared to a positive 250,208 square feet last quarter.
“There is a significant flight to quality in the Fairfield County market, with tenants taking advantage of buildings that have been upgraded by landlords, offer an array of amenities, and are in close proximity to train stations and ample parking,” says Michael Siegel, an executive managing director in the Connecticut office of Colliers International. “The ongoing development of more than 1,000 housing units in Stamford and Norwalk also makes the market more attractive to tenants as it will grow the built-in labor supply and naturally draw in restaurants and support retail.”
The overall office availability rate in the second quarter declined slightly in the Central, Stamford, and Northern markets, to 21.1% down from 22.5% last quarter. The lowest availability was in the Eastern market, at 16.8%, up from 14.1% last quarter. Stamford continues to maintain the highest availability, at 23.9%.
The average asking rent for Stamford Class-A space was $38.31 per square-foot a slight increase from the $38.10 per-square-foot registered last quarter. Greenwich’s average Class-A asking rent climbed to $72.98 per-square-foot, up from $69.32 per-square-foot last quarter.
Some of the larger lease transactions in the second quarter in Fairfield County included: Cartus Corp.’s 239,000-sf headquarters expansion at 40 Apple Ridge Road in Danbury and Starwood Hotels & Resorts Worldwide’s headquarters renewal at 333 Ludlow St. in Stamford. The international hotel company was also granted a $30-million concession by the state’s Department of Economic and Community Development for a 130,000-square-foot expansion at that location. Other deals of note were Datto’s 100,398-square-foot lease at 101 Merritt 7 in Norwalk and Vineyard Vines headquarters relocation to the 91,040-square-foot 181 Harbor Drive property in Stamford.
A number of large corporate space givebacks marred any real improvement in the region’s availability rates. Some of the notable givebacks, according to the Colliers report, included: United Healthcare Group’s move out of Trumbull, returning 252,948 square feet and consolidating its space at 4 Research Drive in Shelton, returning an additional 145,260 square feet to the market. In addition, the Ryan Partnership returned 118,325 square feet of space between two locations for sublease, while Purdue moved forward with its restructuring and downsizing and put two floors of its headquarters, totaling 91,601 square feet, on to the market.