Stamford, CT, January 10, 2018 – Fairfield County is poised for growth as the broader real estate market continues to invest in a diversity of new construction, redevelopment, and office space commitments, according to Cushman & Wakefield. Greenwich and Stamford were again the clear standouts among 2017 office leasing, while a surge in construction reflects the spike in demand to live, work, and play in the county.
The improving economic landscape is not immediately reflected in market statistics through 2017. Office vacancies are at record highs, high street retail on toney streets are suffering with high vacancies, housing prices in some of the most affluent neighborhoods are at or below 2007 levels, and employment has been stagnant since 1990.
A deeper dive, however, reveals a market on the rise, with several large corporations, investors, developers, and retailers making big bets in the county.
“Reports of Fairfield’s demise have been greatly exaggerated,” said Jim Fagan, Managing Principal, noting that the county has demonstrated tremendous resiliency and considerable upside potential. “In addition to robust office leasing in Stamford and Greenwich, Fairfield has attracted an enormous amount of capital that is now pouring into diverse real estate projects. The local business climate is in a state of quiet resurgence that will take most residents by surprise.”
Among several large projects, General Growth Properties is building Sono Collection in Norwalk, one of the few new malls under construction anywhere in the U.S. The 725,000-sf Nordstrom and Bloomingdales anchored mall, valued in excess of $500 million, is expected to employ more than 2,500 people. Additional projects include:
- Irons Gate and Brookfield are jointly developing a nine-building, 600-unit residential project in downtown Stamford on a four-acre site that has remained fallow since 1990. The new construction is valued at more than $200 million.
- Fairfield County’s juggernaut development company Building and Land Technology (BLT) has either invested in, built, or revitalized more than 4 million sf of office space and 2,500 apartment units since 2013. BLT now has nearly 2,000 apartment units under construction, is commencing on a full renovation of the 500,000-sf former Pitney Bowes headquarters, and recently committed to build 406 Washington Boulevard, Stamford’s first new office building in more than a decade. The 500,000-sf tower will have its own platform at Stamford’s train station.
“We are at the beginning of an urban to suburban migration as Millennials are preparing for family life and putting down roots,” Fagan said. “We haven’t seen this level of demand in Fairfield in more than a decade. The future is bright!”
The Fairfield leasing market has also seen a boost. In addition to the core of prestigious firms who occupy space such as Priceline, Terex, Bridgewater, FactSet, WR Berkley, Crane Co., Synchrony, Gartner, and others, several large employers have made new commitments or recommitted to having a vibrant presence in Fairfield.
- Charter Communications announced plans to occupy approximately 500,000 sf at BLT’s new Gateway project under a build-to-suit.
- Germany-based Henkel recently acquired Sun Products and relocated its Consumer Goods Headquarters to 200 Elm Street in Stamford, taking more than 150,000 sf, and announced plans to purchase another consumer products company, Zotos, based in Darien.
- Hedge fund giant AQR signed a long-term renewal and expansion at Greenwich Plaza. Now in addition to Bridgewater Capital, Fairfield is home to the world’s two largest hedge funds.
- Interactive Brokers Group—one of the country’s leading online trading firms—singed a long-term extension and expansion at Greenwich’s Pickwick Plaza.
In terms of overall office leasing, Fairfield recorded 2.3 msf in 2017, a slight decline from the 2.5 msf the prior year, and down 5.7 percent compared with the five-year historical average.
Stamford recorded the lion’s share of activity, with slightly more than one million sf of office leasing in 2017, up from the 987,000 sf leasing the year prior. Meanwhile, Greenwich recorded nearly 424,000 sf of new leasing for the year, a nearly 40 percent increase over 2016, and the highest quarterly total since 2007.
For the fourth quarter, Fairfield County recorded 661,000 sf in total office leasing, with Greenwich and Stamford accounting for more than 44.1 per percent of the county’s total.
The largest Fairfield County office leases in 2017 include:
- AQR Capital Management’s 226,000-sf lease at 1 Greenwich Plaza in Greenwich.
- Interactive Broker’s 162,273-sf leas3t at Pickwick Plaza, in Greenwich.
- Bank of America’s 116,000-sf lease at 600 Washington Boulevard, in Stamford.
- Yale New Haven Hospital’s 100,968-sf lease at 99 Hawley Lane, in Stratford.
- LifeCare’s 64,653-sf lease at 2 Armstrong Road, in Shelton.
For most of Fairfield County taking rents were down slightly from one year ago, with landlords facing the increased pressure from these lower rents and increased tenant procurement costs. Bright spots include Greenwich, where taking rents are now increasing, as well as in Westport and Fairfield, where the occupancy rate is high and supply of space is constrained. Certain Stamford landlords will continue to have a difficult time leasing space in 2018. The exception will be those who own premier buildings within close proximity to Stamford’s train station.
Fairfield County’s office vacancy at the end of 2017 was 23.1 percent, up from 21.2 percent the year prior.
Reflecting the national trend, Fairfield recorded $406 million in total office investment sales in 2017, a 3.7 percent decline from the five-year average. Fagan noted that the lag in sales activity was anticipated, as owners continue to retain assets until their values rise.
The largest Fairfield County investment sales transactions in 2017 include:
- CBRE Global Investors Ltd. $57.3 million acquisition of 750 Washington Blvd., and its $39.7 million acquisition of 680 Washington Blvd, both from SL Green Realty Corp., as part of a portfolio sale. Both properties are in Stamford.
- BRG’s $33.8 million acquisition of 75 Holly Hill Lane, from ClearRock Properties, in Greenwich.
- CT Property & Realty LLC’s $31.8 million acquisition of 83 Wooster Heights Road, from Lee Farm Partners LLC, in Danbury.
- Brunswick School Inc.’s $28.3 million acquisition of 1275 King Street, from Tudor Investment Corp., in Greenwich.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.