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STAMFORD, CT-The Fairfield County office market was dominated by a number of large office lease transactions by hedge funds and financial service firms, primarily in Norwalk and Greenwich, which prompted a decline in the county’s office availability rate.

While statistics in some cases varied widely, reports released by Cushman & Wakefield of Connecticut and CB Richard Ellis on Fairfield County’s office market stated that the county’s rate of vacant space in the third quarter of this year had fallen from rates posted a year ago.

CBRE calculated that Fairfield County’s overall availability rate dropped from 18.3% a year ago to 16.9% at the end of the third quarter this year. C&W, on the other hand, stated that the county’s office vacancy rate dipped slightly from the 20.3% posted just three months ago to 20% at the end of the third quarter of 2003.

“There was very little change in vacancy levels from the second quarter of 2003,” says Michael B. Gordon, director of business development for Cushman & Wakefield. “The most significant changes occurred in the Greenwich and South Central submarkets.”

Dean Shapiro, senior managing director of CB Richard Ellis’ Westchester-Connecticut operations, notes, “The diversity of Fairfield County’s business community once again proved an asset in the third quarter of 2003, as strength in the financial services industry stimulated a market that otherwise exemplified the sluggishness characteristic of this economic recovery.”‘

He adds that the ongoing expansion of hedge funds and other financial services companies, particularly in Greenwich and Norwalk, bolstered leasing activity, produced positive office space absorption and reduced office space availabilities countywide.

Some of the major hedge fund/financial services that leased space in the county in the third quarter included GE Commercial Finance, the Amaranth Group, Graham Capital, Ziff Brothers and AQR Capital Management.

Another positive for the market in the third quarter came when Xerox Corp. decided to stop marketing for lease 225,000 sf at its Long Ridge Road headquarters in Stamford.

Both firms noted that the investment sales market have been extremely active in Fairfield County with a host of major properties changing hands, most recently High Ridge Park in Stamford to George Comfort & Sons in a deal that netted $171 per sf.

CBRE reports that the average asking rent in Fairfield County fell 8% or $2.35 per sf. to $25.99 per sf., which is at its lowest level since the first quarter of 2000.

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