The brokerage firm reports that the overall vacancy rate for Fairfield County for year's end 2002 shot up more than four percentage points from 16.5% in 2001 to 20.7% in 2002. The Stamford Central Business District's vacancy rate rose from 14% at the end of 2001 to 17.9% at year-end 2002. The Norwalk office market, which has been battered by corporate downsizings and sublet space put back on the market, has an office vacancy rate of 32.3% for the fourth quarter of 2002.

Kenneth Krasnow, senior managing director for the New York Metro Region for Cushman & Wakefield, says that there were some bright spots for Fairfield County in 2002, such as the popularity of the Greenwich market for hedge funds, an increase in leasing activity in the Shelton area and a significant amount of investment interest in well-stabilized commercial office and retail assets in the Stamford, Greenwich and Norwalk markets.

While the county suffered from a severe drop in leasing activity, he notes, "It is still a market that investors and capital see as a good market."

In Westchester County, the office vacancy rate fell from 17.3% at the end of 2001 to 16.4% at the end of the fourth quarter of 2002. The once troubled White Plains market continues to perform well with its office vacancy rate falling from 23.2% in 2001 to just above 20% at the end of 2002.

Krasnow says that in part due to the Morgan Stanley deal at the Chevron/Texaco building in Harrison, a number of New York City firms are now studying the Westchester County market to house some of their operations. "It is now a very attractive and logical alternative for companies that want to diversify their operations," he says.

The county has seen a host of law firms and some financial services companies from New York City lease space in Westchester in 2002 and Krasnow says a number of others are now looking to possibly set up back-office or data center operations in the county this year.