Fairfield market experiences record year.
According to the Rostenberg-Doern 1995 Corporate Real Estate Report, absorption totaled 2.16 million square feet of office space in 1994, almost double the absorption total of 1993. More office space was absorbed in Fairfield County in 1994 than in all the previous three years combined.
The county-wide vacancy rate plunged to 17.2 percent, down from 22.6 percent in 1993. The county's vacancy rate has steadily declined since 1989, when it hit a record high of 29.8 percent.
For the first time in five years, new construction has begun in the county. Duracell is building a new 310,000 square-foot headquarters facility in Danbury; and Riverbend Group is constructing a 106,000 square-foot building on spec in Stamford.
Three of the four market areas surveyed in Fairfield County reported significant absorption and sharply lower vacancy rates. The Shelton-Trumbull office market in the eastern half of the county led the way with nearly 970,000 square feet of space absorbed and a nearly 10-point decline in its vacancy rate ot 18 percent. The Greenwich/Norwalk/Darien office market posted a vacancy rate of 12.3 percent, which is the lowest in the region.
The vacancy rate in downtown Stamford hit a record low of 17.5 percent, down from 20.1 percent in 1993. Absorption was approximately 543,000 square feet, more than double the 1993 total. Swiss Bank Corp.'s announced plan to move from Manhattan and build a new headquarters on the city's Gateway District site will further energize the county's largest office market.
"Fairfield County's office market is benefiting from a number of factors, including rents that are competitively priced for companies looking to relocate from New York City and the emergence of financially strong institutional owners who have brought a new vitality and stability to the market," said John H. Rostenberg, principal of Rostenberg-Doern Company, Inc.
Rostenberg also said the county's business environment has greatly improved, thanks largely to the aggressive efforts of the state's economic development office and business groups, such as SACIA and the Fairfield County Information Exchange. "The financial incentive packages that helped lure Witco, London Fog and Swiss Bank to Fairfield County send a clear signal to the region's business community that Connecticut intends to remain one of the nation's leading corporate office locations," he said.
Meanwhile, neighboring Westchester County also showed dramatic improvement, with gains in absorption and lower vacancy rates. The combined absorption for the Fairfield-Westchester region totaled more than 3.3 million square feet, compared to a negative absorption of 121,000 square feet in 1993. the two-county region's vacancy rate fell from 24.4 percent to 19.4 percent. "After several tough years of corporate downsizings, the Fairfield-Westchester region office market turned the corner in 1994. In 1995, we expect to see continued strong leasing activity, moderately higher rental rates and renewed construction activity, especially build-to-suitprojects," Rostenberg said.
The survey of Fairfield County's four market areas showed:
Fairfield County CBD: The vacancy rate in downtown Stamford declined to a new low of 17.5 percent, down from 20.1 percent for 1993. Absorption totaled 543,117 square feet, more than double the absorption in 1993. While Swiss Bank's announcement to build its new 1 million square-foot headquarters in Stamford grabbed most of the limelight, there were a number of other notable transactions in 1994, involving Gartner Group, PIMCO Advisors, Cadbury, GE Capital and Sedgwick. Although downsizings have ebbed in the past two years, Waldenbooks recently announced plans to vacate its 180,000 square-foot headquarters on High Ridge Road.
MAJOR DEALS: Advantage International, ASI, BTR, Cadbury Beverages, Citizens Utilities, Clarendon, Credit Lyonnaise, Daymon Associates, Gartner Group, GE Capital, Great Expectations, Grey Advertising, H.J. Baker, IMRS, J.H. Whitney, Penton Publishing, PIMCO Advisors, Reuters, Savin, Sedgwick, Smith Barney and Swiss Bank.
Fairfleld County East: The Shelton/-Trumbull/Westport office market enjoyed a remarkable year, posting nearly 970,000 square feet in absorption and a nearly 10-point decline in the vacancy rate from 27.7 to 18 percent. Data Switch will relocate to an 83,000 square-foot building it acquired in Shelton. Oxford Health, which is one of the fastest growing companies in the region, leased 125,000 square feet in Trumbull.
MAJOR DEALS: American Technology, Caldor, Cooperative Educational Services, Data Switch, Ford Credit, Joshua Morris, Keno Graphics, Leggette Brashears & Graham, P.C. Net, Physicians Health Service, Playtex, The Ryan Partnership, Saber Equipment, Tauck Tours, Oxford Health, U.S. Capital and Valassis Communications.
Fairfield County West: The office market in the Greenwich/Norwalk/Darien area remains very active, with absorption totaling nearly 670,000 square feet for the year. The vacancy rate fell more than 7 points to 12.3 percent, which is the lowest vacancy rate in the region. Earlier in the year, Plaoma Partners, Mercedes-Benz Credit Corp. and Micro Warehouse announced major expansions. Other highlights included London Fog's corporate relocation from Maryland to Darien and significant leases by ABB, Reed Exhibition, Continental Plastics and Ally & Gargano in Norwalk. In December, Virgin Atlantic Airways announced it was moving its U.S. headquarters from Manhattan to an office complex it plans to acquire in Norwalk.
MAJOR DEALS: ABB, AIG International, Ally & Gargano, Boardroom Reports, BondNet, Continental Plastics, EE Linden, Finehost, GE Capital, London Fog Industries, Micro Warehouse, Paloma Partners, Reed Exhibition Co., Rogers Casey & Associates, Shaffer Clarke & Company, Starwood Capital Group, Software Security, TMG Financial Products, USGI, Witco and Yankelovich.
Fairfield County North: There was little good news to report in the Danbury office market, which remains stalled. Absorption was a negative 16,418 square feet, and the vacancy rate rose from 27.7 percent in 1993 to 28.3 percent. On the plus side, Duracell is nearing completion of a 310,000 square-foot headquarters facility.
MAJOR DEALS: A.G. Edwards, Diba Industries and MetLlfe.
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|Title Annotation:||Fairfield County, Connecticut, commercial real estate market|
|Publication:||Real Estate Weekly|
|Date:||Jan 18, 1995|
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