Banner year for investment sales in Fairfield.

The Fairfield County office market finished 2005 on a strong note, experiencing positive absorption and an improving vacancy rate, according to an office market report just released by commercial real estate services firm Cushman & Wakefield.

A strong contributor to the healthiness of the market was a 255,460 s/f lease signed by UBS to occupy the Purdue Pharma space at 201 Tresser Boulevard in Stamford.

As a result, the county experienced positive overall absorption in 2005 and the overall vacancy rate fell from 18.1% at year-end 2004 to its current level of 17.3%.

Additionally, Fairfield County's labor environment experienced improving signs, with the unemployment rate falling to 4.3% in the county after hovering in the 4.5% to 5.0% range during the year.

"There is significant opportunity in Fairfield County for large tenants in the market," said Jim Fagan, senior managing director and head of Cushman & Wakefield's Fairfield County, Westchester County and Long Island offices. "With more and more companies poised for growth, we expect to see a number of noteworthy leases transacted during the course of 2006."

The Fairfield County investment market experienced a banner year, with sales totaling 2.5 msf and more than $600 million.

Sales were highlighted by two Greenwich properties breaking the $700/sf watermark: 33 Benedict Place was purchased by the Willett Companies for $87.5 million, or $733/sf, and 2 Soundview Drive was purchased by Ceruzzi Properties for $739/ sf. More astonishing was the $243 average price per square foot, an 8.5% increase over last year's average of $224/sf.

Over the same time period, class-A asking rents have increased by 2.1%, indicating investors are bullish on the growth of rental rates in the future and the stability of property values in the county.

"The investment sales market in Fairfield County is healthier than ever," added Mr. Fagan. "Continued low interest rates and the attractiveness of real estate as an investment vehicle are fueling this sector of the real estate industry."

Leasing activity in the county totaled 3.5 million square feet, topping the 2004 total of 2.8 msf despite the slowdown in transaction velocity in the fourth quarter.

Aside from UBS's deal, another major transaction that closed in the fourth quarter was the leaseback of 119,344 sf by Unilever PLC at 33 Benedict Place in Greenwich. General Electric, a long time major tenant in Fairfield County, capped off a busy year of leasing, relocating its consumer finance division within Stamford to Long Ridge Office Park for a total of 278,602 sf, leasing 87,000 sf at the newly built 901 Main Avenue in Norwalk and signing a 43,829 sf lease in the Danbury submarket at 83 Wooster Heights Road.

An underlying trend in Fairfield County's leasing market during 2005 was a "flight to quality".

Properties that offer a wide array of amenities with easy access to the highway or train station generally have low vacancy rates and ask higher rents. Metro Center, located adjacent to the Stamford train station, is more than 95% occupied with asking rents starting at $50 psf.