Despite a rise in the vacancy rate, Fairfield County is poised for multiple lease deals each totaling more than 100,000 square feet of space by year-end, according to one of the largest commercial brokers arranging deals here.
Fairfield County has seen just two lease deals that big to date in 2011 ”“ Bridgewater Associates”™ sublease of some 225,000 square feet of space at Wilton Woods Corporate Center in Wilton, and Sikorsky Aircraft Corp.”™s lease of more than 150,000 square feet at the former Health Net regional headquarters at One Far Mill Crossing in Shelton.
The deals that remain pending appear to involve local companies rather than businesses eying a major relocation to Fairfield County, whether from New York or elsewhere.
The third quarter also saw one major property sale, after the Silverman Group spent $17.6 million to acquire five buildings at Trefoil Park in Trumbull totaling more than 225,000 square feet of space from New Boston Fund.
To date, no Fairfield County company has taken the state”™s “First Five” offer of incentives to add at least 200 jobs, with Cigna Corp., ESPN and TicketNetwork expanding existing operations in the Hartford area under the program.
Other companies have passed on the program, however, including Westport-based Bridgewater and Jackson Laboratories Inc., the latter getting incentives in other forms to create a $1 billion genetics lab in Farmington that will result in some 300 jobs within a decade.
Gov. Dannel P. Malloy said a planned legislative package this fall could include a reauthorization for First Five.
“We are working with 22 companies that would qualify for First Five,” Malloy said. “We are going to have some things to announce.”
Between Fairfield County and Westchester County, N.Y., as many as nine more leases for 100,000 square feet could be completed by year-end, according to Cushman & Wakefield, the majority of them in Fairfield County, without specifying how many of those represent renewals.
That could cut significantly into the countywide vacancy rate of just under 21 percent as calculated by Cushman & Wakefield, down slightly from the second quarter but nearly 1.5 percent above the figure of a year ago.
Several trends are defining the Fairfield County market at present, according to Jim Fagan, senior managing director in the Stamford office of Cushman & Wakefield. That includes a swath of leases expiring on office space put up for sublease by tenants in the early stages of the recession, with landlords once more assuming the burden of finding tenants for those premises.
“People put a lot of sublease space on the market,” Fagan said. “Maybe it just overcorrected initially maybe a little more than it should have ”¦ Sublease space is returning to owners as it is burning off, and that is becoming a burden.”
In its own third-quarter report, RHYS Commercial reported two significant blocks of space being put up for sublet, including 53,000 square feet at 100 First Stamford Place owned by Malkin Properties and 201 Tresser Blvd., much of which is occupied by UBS AG.
Fagan added that while landlords in outlying areas continue struggling to fill available space, that has not been the case for office property owners in downtown Stamford and Greenwich.
New York City-based RFR Realty has a vacancy rate under 10 percent in its Stamford buildings just off Interstate 95, according to Margaret Carlson, who manages leasing for RFR”™s Stamford properties.
“We”™ve been fortunate to capture a lot of the leasing velocity this year,” Carlson said. “The money we have put into the renovations has paid off.”
