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Fairfield County’s office market is poised for a strong year after a relatively flat start to 2005. The transaction pipeline is at its strongest point in the last two years, while the region continues to benefit from the improved economic conditions in the New York metro area. Leasing activity in the county registered 701,226 square feet (sf), strong in historical perspective but lagging last year’s first quarter total of 898,289 sf. Despite strong leasing activity, the county totaled negative 101,140 sf of absorption, as a large portion of the leasing activity was attributable to inter-county relocations. The outlook for the remainder of 2005, however, is bright. The improvement of the economy and job market on a national and local level has led to a robust transaction pipeline in Fairfield County. In comparison to the same time last year, there are significantly more deals pending in the market in excess of 50,000 sf. As these transactions close, there will be downward pressure on the vacancy rate, which stood at 18.3% at the end of the first quarter 2005. The largest transaction during the quarter was GE Consumer Finance’s lease for 279,114 sf at 777 Long Ridge Road in the Stamford Non-CBD. The company will relocate employees from its current home at 1600 Summer Street, a 270,434-sf building located in the same submarket. UBS Warburg increased its space at 400 Atlantic Street, taking another 36,782 sf after leasing 73,564 sf in the building in 2004. Stolt Nielsen Transportation signed a lease for 29,198 sf at 800 Connecticut Avenue in Norwalk, relocating from 8 Sound Shore Drive in Greenwich. Fairfield County also experienced strong renewal activity during the quarter. Praxair, Inc. renewed its lease and expanded by an additional 15,000 sf at 39 Old Ridgebury Road in the Greater Danbury submarket to consolidate employees at the complex. The 10-year deal totals 197,729 sf. Playtex Products renewed at Nyala Farms in the Westport and Day, Berry and Howard renewed its lease effective in the first quarter at 1 Canterbury Green in the Stamford CBD for Direct, class-A rental rates at the end of the quarter totaled $28.25 per square foot (psf), increasing from the year-end average of $27.75 psf and the first quarter 2004 average of $26.97 psf. Greenwich averages the highest rents in the county at $48.27 psf, while the lowest average rent is in the Eastern submarket at $20.28 psf. Fairfield County's investment market continued in strength in 2005 with two major sales closing in the first quarter. 800 Connecticut Avenue, a 402,199-sf building located in Norwalk sold for $71.0 million, or $177 psf. This disposition represents one of the highest total amounts paid for an office building in Norwalk's history. Additionally, the Berwind Property Group purchased 1010 Washington Boulevard, which is located in the Stamford CBD, for $21.4 million, or $156 psf. The investment market is expected to remain robust for the remainder of 2005, as several buildings are currently on the market for sale, including: 33 Benedict Place in Greenwich, 225 High Ridge Road in Stamford and Berwind Property Group's 35 Nutmeg Drive in Trumbull, 185 Plains Road in Milford, 187 Danbury Road in Wilton and 2150 Post Road in Fairfield.
41,900 sf.
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