STAMFORD, CT-In the third quarter, companies were already showing signs of reevaluating their prior office space requirements in Fairfield County even before the terrorist attack on the World Trade Center in Manhattan on Sept. 11.

Commercial brokerage firm Cushman & Wakefield of Connecticut, Inc., in its analysis of the Fairfield County office market in the third quarter, reports that the overall vacancy rate in the county rose from 12% at mid-year to 14.1% at the end of the third quarter.

“The real estate market in Fairfield County has changed dramatically over the past three months,” says Kenneth M. Krasnow, regional managing director for Cushman & Wakefield of Connecticut. “After slowing from record activity in 2000, activity in Fairfield County remained slow for much of the quarter and tenants waited to make decisions until economic indicators became more certain.”

He continued that a year ago bidding wars for available space were commonplace and companies aggressively snatched up space for future expansion needs. So far in 2001, “Tenants have reevaluated space requirements and returned excess space to the market,” Krasnow notes.

Cushman officials noted that in the South Central area of the county (Norwalk, Weston, Wilton, Darien and New Canaan) more than 600,000 sf of sublease space is now on the market.

Demand continues to be high in the downtown Stamford, due in part to the collapse of the World Trade Center on September 11, which has prompted a number of New York City companies to seriously consider relocating to the northern suburbs.

“Due to the disaster at the World Trade Center, there has been an effect on the real estate market in the Stamford Central Business District, where premium available space was both leased and removed from the market,” Krasnow relates. “Statistically, this has caused the direct average rental rates to fall because some of the higher-priced premium space in the market was leased. The numbers are somewhat misleading in that rental rates are lower, but demand is now higher.”

Class A directed weighted average rental rates in downtown Stamford dropped from $42.74 per sf in the second quarter to $37.73 per sf. at the end of the third quarter.

Krasnow notes that American Express’ lease deal of approximately 190,000 sf at 400 Atlantic St., effectively wiped out the largest block of premium Class A space in downtown Stamford, which was one of the key factors in the steep drop in the office rental rates in downtown Stamford in the third quarter.

Cushman officials also note that the largest sales transaction in the third quarter was the sale of One Fawcett Place in Greenwich to Innovest Group. The 75,212 sf building sold for $26,661,100 or $354.48 per sf, which ranks as the third largest commercial property sale so far this year in Fairfield County.

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