Fairfield enjoys fruits of robust office sector.

Keeping with the national real estate trends, Fairfield County's office real estate market thrived throughout 2006, as growing corporate confidence generated significant expansion and renewed commitment to the county, contributing to the office market's strength.

Space returns to the market decelerated and financial services companies burgeoned as growth drivers for the county's economy. Returns to the market were relatively restrained as available space declined by 5% in the last year. The market also responded with building refurbishments and increased average asking rents.

Even though the overall availability rate declined only slightly to 15.15%, from 15.89% last year at this time, the demand for space is back at high levels. More than 3.8 million sq. ft. was leased throughout the course of the year, as financial services companies continue to be the key catalyst stimulating the market. Over the last year, 34% or 1.3 million s/f of overall velocity were a product of the financial services continued commitment to the county.

Most of this activity was concentrated in Stamford, as RBS exhilarated the market along with UBS, Legg Mason, Bank of Ireland, SAC Capital and Oak Hill Capital. This sector is laying strong roots in the county by taking large blocks of space to accommodate their employee, operational and projected growth needs.

Although the number of transactions over 20,000 s/f slowed by 4%, they were in no way exiting the market. This segment of the market accounted for more than 51% of the county's overall leasing, at nearly 2 million s/f Inspired by the national and local real estate market conditions, landlords responded by raising average asking rental rates by 5% psf throughout Fairfield County.

During the year, there was a flurry of major leases over 20,000 s/f completed. These included: Legg Mason's lease for 151,000 s/f at First Stamford Place in Stamford CBD; GE Real Estate's lease for 150,000 s/f at 901 Main Avenue in Norwalk, UST's move from Greenwich to 6 High Ridge Park in Stamford, Boehringer Ingelheim Pharmaceutical's expansion by 98,000 s/f on 39 Old Ridgebury Road in Danbury; Sikorsky Aircraft Corporation's relocation and expansion of 110,000 s/f at 3191 Broadbridge Avenue in Stratford.

The story of the year which received the most attention was RBS' announcement and ground breaking, as they will build their North American Headquarters in Stamford. The building will be right off 1-95, visible to the highway, a two minute walk from the Stamford Train Station and across the street from the UBS complex. RBS has estimated to bring up to 2,000 jobs to the city of Stamford, while the new construction will add up to 450,000 s/f to the City's commercial real estate inventory.

The market is optimistic that the presence of RBS will further validate Stamford's reputation as a premier location for financial services in the region. It is also regarded as a positive indicator for the City of Stamford and Fairfield County's long-term economic prosperity and attractiveness for tenants, as well as real estate owners and investors.

The overall Fairfield County market recorded 78,390 s/f of positive net absorption for the year. This figure showed lower compared to last year, ending 2005 with positive net absorption of 331,186 s/f However, looks can be deceiving. New conversions and renovated office facilities added 650,000 s/f to the inventory over the year. This stole some thunder from the exceptional results the Fairfield County market experienced during 2006.

The County's overall average asking rents rose 5% this year over last, closing the year at $29.61 psf.

According to Robert Caruso, managing director of CB Richard Ellis' Westchester/Fairfield office, The Fairfield County leasing market had an outstanding year. This environment is prompting landlords to reduce concessions and raise rents. We're seeing this particularly in Stamford and Greenwich CBDs," said Robert Caruso, senior managing director at CBRE."