Strong 2013 expected for commercial real estate
Fairfield County commercial real estate experts are expecting a strong year in 2013.
“Our pipeline is full,” said Al Mirin, senior director of investment sales at Cushman & Wakefield’s Stamford office. “We think volume activity is going to exceed 2012 very easily.”
At the annual State of the Market meeting, held at Giovanni’s II in Darien Jan. 9 by the Southern Connecticut Building Owners and Managers Association (BOMA), industry experts agreed the commercial real estate market is on the verge of an upswing.
“Two years ago buyers and sellers were 20 percent apart (in price),” said Mirin, a panelist at the event. “That’s why the market was so bad. Now that gap is close to 5 or 6 percent.”
Mirin said landlords are exhausted and buyers know there isn’t going to be a flood of foreclosures anymore. Additionally, in Fairfield County, especially in Westport, Darien and New Canaan, the demand is now outweighing the supply.
“We’re really auctioneers when we sell a property,” he said. “People come and say they want a property in Darien. We say you have 10 choices and nine of them aren’t on the market. That’s what you’re going to see.”
Nationwide, capitalization rates have been at a historic low and prices at a historic high on certain assets, allowing for strong investment opportunities, Mirin said. He said there’s been a push toward private capital investments in commercial real estate because it’s a tangible way to diversify a portfolio and control returns.
Comparing the volume of retail, office and industrial buildings sold in Fairfield County and Westchester County, N.Y., Mirin said Fairfield has outpaced Westchester in the last two years.
In the fourth quarter of 2012, Fairfield County had more than $200 million in sales with a rolling 12-month total of nearly $600 million. In comparison, Westchester County saw fewer than $50 million in sales and a rolling 12-month total of about $250 million by the end of the fourth quarter, he said.
Mark van Summern, principal of Perkins Eastman, an architecture and design firm, said Fairfield County municipalities do a good job of emphasizing downtown and transit-oriented development.
Companies are increasingly looking for ways to attract young talent, Summern said, which means Realtors and developers must be mindful of companies’ desires to relocate to convenient points of transportation, have modern office spaces and be mindful of their offices’ environmental impact.
With increased sales and more people moving to Fairfield County, Mirin said the county has made significant strides in making its towns more vibrant and attractive to live in. When the boom of apartment construction first started, Mirin said he had his doubts, but has since changed his mind.
“The phenomenal growth in that sector has been tremendous,” Mirin said. “Rent on south end (of Stamford) is higher than anyone anticipated. Say what you want, this market is here to stay.”
“There will always been growth in Manhattan,” he continued. “We’re hopeful that it will continue to filter out more than it has and that it will continue to fuel both Westchester and Fairfield.”