“The point is, the boom in office deals is not going away.”
So says Jeffrey Williams, Colliers”™ executive managing director and market leader in Stamford, about the boom that Fairfield County and the surrounding area have seen during the pandemic and its putative aftermath. Part of the proof, he told the Business Journal, is Colliers”™ recent extension of its own 7,075-square-foot lease at 1055 Washington Blvd.
“We”™re busy on all fronts,” Williams said. “The most surprising thing is that we”™re not seeing a lot of downsizing with firms, though there”™s no question some are doing it ”” and some are expanding.”
Among Colliers”™ most recent transactions are the relocation of talent solutions firm Insight Global from 100 Washington Blvd. to an 8,505-square-foot space at 4 Star Point in The Village, the indoor-outdoor work-play environment designed to bring together companies representing content and media, brands and marketing, social and experiential, and finance and investment in one central hub.
“It”™s a great concept,” Williams said of The Village. “I believe it”™s now 100% occupied. We got the call from Insight Global and were told, ”˜This is where we want to go.”™ We asked if they were interested in seeing something else, and they said, ”˜No, this is the concept we want.”™
“I wouldn”™t mind being there,” he chuckled. “The facilities are great, with the business center, the rooftop space, a private club, and now Cisco Brewers opening there. They”™ve done an excellent job.”
Colliers also completed a 2,577-square-foot renewal and expansion in Stamford at 1010 Washington Blvd. for media company TradeWinds, and an 1,850-square-foot lease for financial advisory firm Prophet Capital, which is relocating from New York City to 325 Greenwich Ave. in Greenwich. Despite the common belief that office tenants have been signing short-term office leases, Williams noted that the average deal length for all of the new transactions was more than five years, which he said is another sign of market strength.
The one sector that is generally looking to downsize, he said, is law firms.
“They traditionally take a lot more space per office user, versus general offices,” Williams said. “They were doing 500 to 800 square feet per lawyer, but we”™re not seeing that anymore.
“You don”™t need 600 square feet per lawyer,” he continued. “As they”™re going more and more digital, they don”™t need all that space for files and papers. The old saying was, ”˜Give a lawyer a 20 x 20 office,and he”™ll use every single inch of it.”™ But it turns out that if you give him 10 x 10, he”™ll be just fine.”
In general, he added, an office will set aside 250 square feet per employee.
In the meantime, Elliott Management, the $41 billion hedge fund founded by Paul Singer, is opening offices at 600 Steamboat Road in Greenwich and in Florida as part of its decision to relocate its headquarters from New York City to West Palm Beach.
“Greenwich has been a major beneficiary, if you will, of the New York pandemic,” Williams remarked. “That”™s why you”™re seeing rather large companies like Elliott Management leaving New York City and taking space in Greenwich.”
Greenwich is so hot, he added, “that the 60,000-square-foot user is out of luck in its central business district.”
And the state has stepped up to retain companies such as investment management firm AQR Capital, which received a loan and grant of up to $35 million to remain at the 354,000-square-foot Greenwich Plaza, where other major tenants include Lone Pine Capital, Silver Point Capital, and iCapital Network; located at the Greenwich train station, it too is 100% occupied.
All the activity represents a significant turnaround from March 2020, when Gov. Ned Lamont began ordering nonessential businesses to close.
“From then through June-July, there was nothing going on at all,” Williams said. “Then we started to see activity picking up quite a bit, with New York companies starting to come out and investigate the market.”
Labor Day shift looming
C-suite executives are continuing to inquire about real estate costs, housing and mass transit, he said: “There was a lot of tire-kicking going on, with the result that a lot of deals were signed.”
Colliers believes that the oft-floated theory that once companies see the advantages that Fairfield County and the region can offer and relocate and/or open satellite offices here, they will stay, even as Covid-19 appears to be receding.
“New York has come back just as strong as it did after 9/11 ”” if not stronger,” Williams said. “But a lot of C-suite executives with roots in New York are looking to at least divide their time between New York and here.”
Another concern ”” that companies would simply accept the work-from-home model as at least semi-permanent ”” no longer seems to be in play, he said.
“In my opinion and from what I”™m seeing, a lot of companies are saying to their employees, ”˜We”™ll see you (in the office) on the Tuesday after Labor Day (Sept. 6),” he said. “We”™ll be seeing the hybrid approach, there”™s no question about it,” but post-Labor Day seems to be the date for when a resumption of full-time, in-office policies will go into effect.
Even so, “There will be reconfiguring of space,” Williams said. “You may see a lot more hoteling,” where employees”™ use of desks, cubicles and offices are scheduled. “The collaborative approach that”™s been the norm just isn”™t going to be possible” at some locations, he said.
Landlords have been trying to upgrade amenities to retain and attract tenants, he continued, with MERV(minimum efficiency reporting value) and other updated air-flow systems being installed.
“We”™re still not post-pandemic,” Williams warned, “but we have a lot more clarity on where things are going, vis-Ã -vis three, four, five months ago.”
