Fairfield market stable as Westchester activity slows.
Fairfield County Overview
According to the Cushman & Wakefield research, Fairfield County's rise in vacancies can be attributed to major changes in inventory and available space during the first half of 1999. There was a total increase of 534,444 square feet of overall available space during the first half of 1999. For example, in the Eastern submarket, which comprises 6.6 million square feet, 351,498 square feet of space was added with the completed construction of three new projects: 12 Progress Drive, Reservoir Corporate Center and 3 Corporate Drive, all in Shelton, CT. In addition, four available buildings totaling 337,027 square feet became available for lease this year: the Warnaco Building in Bridgeport; 1515 Summer Street in Stamford; 40 Lindeman Drive in Trumbull; and 101 Oakview Drive, also in Trumbull. Other large blocks of space, including 71,211 square feet at 401 Merritt 7 in Norwalk and 70,000 square feet at 83 Wooster Heights Road in Danbury, also became available.
"In contrast to the negative net absorption overall in Fairfield County, the Stamford Central Business District (CBD) has positive net absorption of 16,383 square feet. With the overall vacancy rate at 5.9 percent, only 0.7 points higher than the same period last year, the search for quality available office space in the Central Business District remains a challenge," said Rebecca Leeds, manager of Cushman & Wakefield of Connecticut's Research Consulting Services Group.
The report outlines other activities in Fairfield County's submarkets. For example:
In Greenwich, more available space is expected shortly, as Fortune Brands announced that it will vacate its 179,689 square-foot headquarters at 1700 East Putnam Avenue. In addition, the U.S. Tobacco building at I Sound Shore Drive is for sale.
In Norwalk, more available space is expected next year. For example, Caldor's headquarters at 20 Glover Street will be available for lease, while additional space for lease or sublease from Purdue Pharma will also become available.
Fairfield County's Central submarket, which is comprised of Westport, Southport and Fairfield, has the county's lowest vacancy rate, 2.9 percent overall.
In Greater Danbury, more than 58 percent of the total available space is for sublease, which includes 214,218 square feet by Union Carbide at 39 Old Ridgebury Road and GE Capital Corporation's sublease of 53,970 square feet at East Ridge Executive Park.
According to Kenneth Krasnow, managing director for Cushman & Wakefield's Connecticut and Westchester County operations, "Although vacancies increased in the Fairfield County Non-Central Business District, rental rates continued to rise, with the average asking rental rate reaching $22.82, and the highest average asking rate in Greenwich at $36.22 per square foot at mid-year. Effective rates, which factor in tenant concessions such as free rent and work allowances, have increased at an even greater rate."
The first half of 1999 saw the continued trend of office market fluctuations resulting from larger corporate downsizings and restructuring. For example, Nine West Group added 122,534 square feet of available space to the Non-CBD in White Plains. In addition, there are currently 11 buildings, totaling 2,315,763 square feet, that are more than 95 percent vacant in Westchester County, and with many of these buildings only able to accommodate full-floor users, this has hindered leasing activity," Krasnow noted. "With demand strongest in the 10,000 square feet and under, many of these building owners plan to renovate these properties to accommodate smaller tenants."
Leasing activity in Westchester County slowed during the second quarter to total only 947,358 square feet year-to-date, a decrease of 18 percent from one year ago. The vast majority, approximately 89 percent of the square footage leased, were transactions of less than 30,000 square feet.
Once again, asking rental rates steadily increased despite sluggish teasing activity by $1.01 per square foot, with the biggest increase occurring in the Central submarket by $3.10 per square foot to $25.95 per square foot, according to Leeds.
The report specifically notes that:
* More than 31 percent of overall available office space in Westchester County is located in the White Plains CBD, the most of any other submarket. Excluding the White Plains CBD, the overall vacancy rate in Westchester County is 12.2 percent. Further, 75 percent of the available space in the CBD is located in five buildings: 360 Hamilton, 445 Hamilton, 44 South Broadway, 120 and 222 Bloomingdale Road. The White Plains CBD vacancy rate totals 6.8 percent when these buildings are not included.
* In addition, the increase in the direct vacancy rate from the first quarter and negative year-to-date net absorption of 118,391 square feet within the White Plains CBD can be attributed to the 212.855 square feet of additional space at 44 South Broadway. This space was originally offered for sublease by Oxford Health Plans, but is now available directly from the landlord.
However, activity overall within the Central Business District remained steady through the second quarter, with more than 288,200 square feet leased.
The Northern submarket has the lowest vacancy rate. 7.2 percent, of any Westchester County submarket.
More space may be added to the Central submarket in the fourth quarter of 1999 for April 2000 availability when Towers Perrin may vacate approximately 149,868 square feet at 100 Summit Lake Drive in Valhalla, NY.
The largest transaction in the Westchester County submarket was the sale of 500 Mamaroneck Avenue in Harrison to W&M Properties.
In downtown New Rochelle, New Roc City, the 500,000 square-foot retail/entertainment building, is nearing completion.
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|Title Annotation:||real estate market in Fairfield County, CT and Westchester County, NY|
|Publication:||Real Estate Weekly|
|Date:||Aug 18, 1999|
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