Fairfield experiences a relocation revival.
A few examples of this trend are: Dun & Bradstreet's announcement that it would transfer its top executives that it midtown Manhattan to Wilton, CT; Witco Chemical's relocation from New Jersey to consolidate its headquarters into 250,000 square feet of office space in the Greenwich American Centre; Weeden & Co.'s move from downtown Manhattan to 145 Mason Street, a building they purchased in Greenwich, CT, and A.T. Clayton & Co., Inc.'s departure from 10 East 40th Street to 600 Steamboat Road, alos in Greenwich. Not a relocation, but a significant infusion out outside capital, earlier in the year Zell/Merrill Lynch investment fund purchased five significant office complexes in Stamford, CT for $132 million.
What is motivating these companies to uproot offices and workers for suburban office buildings and parks, and why now? As in the past, corporate relocation decisions continue to be driven by economics and quality-of-life issues. On the economics side, the State of Connecticut is offering substantial grants to lure tenants from outside the state. Dun & Bradstreet was given considerable financial incentives to relocate and consolidate in Wilton, CT. In general, New York continues to act on a case-by-case basis, while Connecticut has been more consistent in its efforts to attract a broader base of outside companies.
However, money was not the only deciding factor in the Dun & Bradstreet move as 42 of their 300 executives already live in Fairfield County. Companies continue to move to Westchester and Fairfield counties for the same reasons people and families do. They want a more tranquil setting and a better commute for employees who may already live in the counties.
Like their governments, commercial real estate owners and developers in Fairfield and Westchester counties are aggressively courting the relocation market. Owners continue to launch marketing campaigns that target firms in New York City as well as within their own counties. Landlords are pursuing tenants by offering attractive rents. Rents and commercial real estate prices are significantly less expensive in Westchester and Fairfield than they are in New York City. Commercial building owners are also upgrading and renovating product that was built in the '70s and '80s in order to stay competitive.
In addition, office parks like Royal Executive Park, the six-building, 540,000 square foot complex on 80 acres in Rye Brook, NY are offering quality-of-life environments such as naturally preserved lakes and verdant, open space. On-campus amenities and services like fitness facilities, dry-cleaning and video outlets as well as day care centers and restaurants are also attracting many company executives who like the combination of a countrified setting with everyday conveniences.
Another factor that has become increasingly more significant in allowing firms to relocate from urban centers to suburban hubs is the advent of sophisticated telecommunications systems. Firms no longer need to cluster workers in major urban settings in order to conduct business effectively and efficiently. The feeling among executives that they need a New York address for image and perception is also changing as their clients also make the move to suburban office buildings and parks.
In addition to companies relocating to the Westchester/Fairfield area from outside the region, local firms are signing new leases to accommodate expansion needs and consolidations due to growth. Quality space is becoming scarce, especially contiguous blocks of space for large users. Office tenants seeking 100,000 square feet or more have only a limited number of options. Furthermore, commercial rental prices have stabilized in the Westchester and Fairfield areas, and there is a net gain in overall occupancy levels. All in all, the above news causes us to greet 1994 with optimism for commercial real estate north of New York City.
Joseph A. Cabrera Executive Managing Director Galbreath, Riverbank
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|Title Annotation:||Annual Review & Forecast, Section II; commercial tenants relocate to Fairfield County, Connecticut and Westchester County, New York from New York, New York|
|Author:||Cabrera, Joseph A.|
|Publication:||Real Estate Weekly|
|Date:||Jan 26, 1994|
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