Fairfield County”™s office property market closed 2021 on the upswing, according to new data published by CBRE.
For the full year of 2021, the region”™s leasing activity totaled 1.7 million square feet, up 23% from 2020 but 13% below the five-year annual average. For the fourth quarter of the year, activity totaled 554,000 square feet, up 28% from the third quarter and 4% above the five-year quarterly average. Q4 marked the second consecutive quarter for increased leasing activity and the second-best quarter for this commercial real estate sector since the Covid-19 pandemic took root.
Sublease space leasing was also on the rise, accounting for 22% of all available space during the quarter. This was a 100 basis points increase from the third quarter.
Q4 also saw the availability rate drop for the second consecutive quarter ”” a 30 basis points decline to 25.9% ”” although that percentage was also close to the historically high levels. The market saw 281,000 square feet of positive absorption last year.
During Q4, the largest transactions were Philip Morris USA”™s arrival into a 71,484-square-foot space at 677 Washington Blvd. in Stamford and Apollo Management LP”™s 43,403-square-foot lease at 100 West Putnam Ave. in Greenwich.
The largest lease renewals involved ONS”™ 39,048-square-foot space at 5 High Ridge Park in Stamford and Axiom International Investors”™ 35,024-square-foot space at 33 Benedict Place in Greenwich.
Fairfield County”™s overall asking average rent in Q4 was $34.58 per square foot, down 3% from the previous quarter and down 1% from Q4 2020. CBRE attributed the quarterly decline the pricing of high-quality office space above the leasing average, particularly in the Stamford central business district (CBD).
Among the regional submarkets, the Stamford CBD”™s average asking rent was down 3% from the previous quarter and down 4% from one year earlier. The Greenwich CBD”™s rents were up 4% from Q3 to $94.66 per square foot, and this submarket”™s average asking rent is now at its highest level since Q4 2008.
Within Fairfield County”™s submarkets, the CBDs in Greenwich and Stamford recorded the highest transaction levels, accounting for 46% of all activity in Q4 and 41% for all of 2021.
The Greenwich CBD topped its five-year quarterly average by 81%, with 92,000 square feet in Q4 and 340,000 square feet for 2021. Financial services tenants accounted for 79% of all of the Greenwich CBD”™s leasing activity last year, up from 68% in 2020.
The Stamford CBD recorded 268,000 square feet of leasing activity in Q4, which was 39% better than its five-year quarterly average. For the full year, this submarket totaled 653,000 square feet, up by 62% from 2020 but also 16% below its five-year annual average. Stamford”™s tenants were on the hunt for high-quality space, with Class A buildings accounting for 95% of the quarterly total and 90% of the full year”™s transactions.
Elsewhere in Fairfield County, leasing activity was somewhat less vibrant. Central Fairfield recorded 69,000 square feet in Q4 and 201,000 square feet for the full year, a 39% year-over-year decline. The Fairfield East submarket saw 135,000 square feet in 2021 activity, down 20% year-over-year, while the Northern Fairfield submarket”™s 2021 total of 29,000 square feet represented an 88% decline from 2020. The Eastern and Northern submarkets only generated 23,000 square feet and 9,000 square feet for 2021, respectively.
