Stamford, CT, July 11, 2018 – In the first half of 2018, Fairfield County saw a modest increase in suburban office market leasing activity, as well as an increase in overall vacancies, according to Cushman & Wakefield’s Q2 2018 Fairfield Office Market Report.
New office leasing activity in the county was at 1.15 million-square-feet at the end of the second quarter of 2018, which was a 4.2 percent increase over the last twelve months. The South Central (Westport/Fairfield/Southport) and Greenwich markets had the largest year-over-year increases in leasing demand, up 72.3 percent and 45.6 percent, respectively. Stamford continues to lead the county in overall lease volume with over 390,000-square-feet in new leases in Q2 2018, but this total is 18.8 percent below Q2 2017 levels. Stamford also experienced the largest increase in vacancies year-over-year, rising 390 basis points to 30.6 percent, due largely to tenant relocations and consolidations.
Greenwich registered the largest year-over-year drop in overall vacancy levels, falling by 330 basis points to 12.8 percent, with average asking rents now at $51.71. However, the overall vacancy rate for the county ticked up slightly, increasing from 23.2 percent in Q1 2017 to 24.5 percent in Q2 2018, while the county’s average asking rents fell by $1.51-per-square-foot over the last twelve months to $32.47.
The largest leasing transactions for the second quarter of 2018 were Survey Sampling International’s renewal of 47,765-square-feet at 6 Research Drive in Shelton, as well as Cenveo’s 30,590-square-foot lease at 200 First Stamford Place in Stamford.
At $23,250,000, the sale of 1 Gorham Island Road in Westport led all sales transactions in the first half of the year.
“With leasing activity projected to stay on pace with last year, we expect vacancy levels to continue to rise in the short-term as tenants use their space more efficiently,” said Steve Fiore, Research Analyst at Cushman & Wakefield. “But we also expect transportation-oriented markets like Stamford to begin improving as tenants take advantage of the increasingly vibrant aspect of the community.”
Jim Fagan, Managing Principal, Connecticut and Westchester Market Leader of Cushman & Wakefield added, “In the longer term, the good news this quarter was the opening of Connecticut’s new CTrail Hartford Line, the $768 million project to connect the state’s largest cities. This is expected to help tenants in the county tap into a larger employee population by providing some much-needed commutation relief. All of this could contribute to improving conditions for the Fairfield County office market.”
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