Fairfield County commercial real estate witnessed positive metrics for the third quarter of 2015, notably for net absorption, even as it endured several down-trending asterisks, including a RHYS Commercial finding there is 8.4 percent more available office space now than a year ago.
Commercial real estate company Newmark Grubb Knight Frank, based in Manhattan with offices in Stamford, reported Q3 total net absorption for Fairfield County commercial real estate at a positive 218,230 square feet, despite a double-digit drop in demand. There were fewer contractions and more expansions than in the prior quarter, the company reported.
The Stamford central business district”™s leasing activity reached 389,580 square feet, the highest level since 3Q of 2009, NGKF reported.
Over the past five quarters, the NGKF report said, rental rates have trended downward by an average of 0.6 percent per quarter, ending at $34.95 per square foot.
NGKF said Q3 mirrored Q2 “with an improving availability rate and gains in occupancy despite the market drops in demand.”
“Third-quarter leasing activity totaled approximately 800,000 square feet, lagging behind last year”™s and last quarter”™s totals by 20.2 percent and 19.3 percent respectively,” the report read.
NGKF said the decline represented what it termed “a marked decrease in both renewal and sublease transactions.”
RHYS Commercial in Stamford reported, “The Fairfield County office market made positive strides during the third quarter of 2015, but remained behind where it stood at the end of last year”™s third quarter.”
There was 12,081,946 square feet of total available space within the market at the end of the quarter, a 1.8 percent decrease from the previous quarter, but still 8.4 percent more than a year ago.
RHYS broke down the so-called “direct” market vs. the sublease market.
“Direct space accounted for 11,177,945 square feet of total available space, marking a decrease of 1.2 percent quarter-to-quarter, but an increase of 10.8 percent year-over year,” the company said. “Sublet space accounted for the remaining 904,001 square feet of total available space within the market, which was a 9.2 percent decrease during the quarter and a 15 percent decrease since the third quarter of last year.”
RHYS said, “After witnessing almost 1,000,000 square feet of negative net absorption during the first half of the year, the market bounced back with its strongest quarter of net absorption since the first quarter of 2008. There was 345,306 square feet absorbed within the market during the quarter, 282,779 square feet of which was direct space and 62,527 square feet of which was sublet space.”
All four of the submarkets ”” identified as central, northern, southern and eastern ”” contributed to the positive net absorption.
The market”™s overall average rental rate of $32.92 per square foot ticked up by 0.2 percent during the quarter, but remained 4.0 percent lower than a year ago.
