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STAMFORD, CT-According to CB Richard Ellis, the countywide office vacancy rate shot up from the 7% rate at the end of the first quarter to 9.1% for the second quarter. All of the major geographic areas in Fairfield County reported higher vacancy rates for the second quarter as compared to three months earlier. James Fagan, senior managing director for the Westchester-Connecticut suburbs for CB Richard Ellis, contends “It was like going from 90 miles per hour to zero (in terms of leasing demand).”

“Everybody thought that this was going to be over by the third quarter of this year,” Fagan reports. “But now some are saying that maybe it will be the second quarter of next year.”

Most of the activity now is based on leasing interest prior to February and even in those cases, Fagan notes “It is hard to get them to commit.” While the Fairfield County office market is in fine shape in terms of historical performance, the market has definitely cooled as compared to last year.

Lower Fairfield County now has a 8.6% vacancy rate as compared to the first quarter rate of 7.5% and Central Fairfield County’s rate is now 12.3% versus eight percent in the first quarter. Upper Fairfield County saw its rate shot up to 11.9% from the 8.4% rate in the prior quarter and Eastern Farfield County’s rate increased slightly to 5.9% from the 4.6% rate posted 90 days earlier.

He comments on the vacancy rate figures, “The tenancy market has been demonstrably weaker for the past six months.” He adds, “The markets grew weaker faster and further than anyone believed.”

He continues that the slowdown in tenancy demand will likely mean that it will be extremely difficult for any new office construction to move forward. He says this is particularly true in Downtown here where three property owners are marketing their office developments to major users.

“There are a number of large companies that were looking for space in Stamford that have recently pulled back,” Fagan reports. He continues, “Anybody who has a desperate need for space is trying to put off that capital commitment until they figure out what is happening with the economy.”

He also contends that some sublease office space will come back on the market in the near future, which will put upward pressure on vacancy rates here. Fagan notes that the slowdown began in February of this year and has pretty much continued through the second quarter.

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