C&W Predicts Rising Rents in Westchester, Fairfield

In fact, James Fagan, senior managing director and head of Cushman & Wakefield's Fairfield and Westchester County division, expects rents in Downtown Stamford, CT to reach $60 a sf by year's end and $50 a sf in the near future in Downtown White Plains.

Cushman & Wakefield reports robust leasing activity caused the office vacancy rate in Fairfield County to drop to 13.6% at the end of the second quarter. The vacancy rate has fallen 30% over the last three years due to large corporate requirements and an influx of financial services firms into the Greenwich/Stamford markets, Cushman & Wakefield officials say. The brokerage firm states the vacancy rate in Westchester County fell from 15.4% a year ago to 14.8% at the end of the second quarter, despite some large corporate givebacks of space of late. Newmark Knight Frank puts Westchester's office vacancy rate at 11.7% at the end of the second quarter of 2007, down from the 13.6% rate 12 months ago. The brokerage firm, which has operations in Greenwich, estimates the 2Q07 vacancy rate in Fairfield County at 11.6% down from the 12.8% rate a year go.

In Fairfield County, C&W notes that the former Equity Office Properties portfolio, through its new owner Blackstone Group and contract vendee RFR Holdings LLC, are now charging tenants up to $90 per parking space per month, which could add up to $4.75 per sf to the rental rate depending on how many spaces a tenant requires. By mid-2007, landlords in Downtown Stamford were seeing class A rents climbing toward $50 a sf, while in Downtown White Plains rents for prime blocks of class A space have secured rents of more than $40 a sf. C&W has the direct average rent for class A space in Downtown Stamford at $40.06 and in Downtown White Plains at $34.83 at the end of the second quarter of '07.

Fagan, at a press briefing held at the L'Escale hotel in Greenwich last week, said that the leasing and sales markets in Fairfield are stronger than in neighboring Westchester. He noted there are currently 10 deals of significant size that he expects will close in the next 60 to 90 days in Fairfield County.

Commenting on the strengths of the suburban markets, he says, "A lot of this activity can be attributed to the tightening of the Manhattan office market combined with the hyper-growth of financial firms. These factors are encouraging a number of big tenants to consider alternatives in Fairfield and Westchester counties. We are seeing tenants from a diverse range of industries looking into options in these markets."

At the press event, Fagan said the continued strong activity in both regions could result in record class A office lease deals in both markets in the next 12 months; a transaction valued at $75 a sf in Downtown Stamford and $50 a sf deal in Downtown White Plains.