Between the third and fourth quarters of 2007, 100,000 square feet of office space went onto the Danbury market, according to Cushman & Wakefield of Connecticut Inc., lifting the city”™s overall office vacancy rate from 15 percent to 18 percent, the highest in Fairfield County.
Despite the escalating vacancy trend, the average rent for class A office space in Danbury rose slightly to just under $25 per square foot; lower quality class B space stayed flat at just above $17. And the city continues to boast one of the lowest unemployment rates in the Northeast, adding 1,000 jobs between October and November according to the latest estimates from the U.S. Department of Labor.
Stamford saw an identical amount of space vacated in the fourth quarter that reflected the impact of Xerox Corp.”™s relocation to Norwalk. The Xerox headquarters has since been leased to GE Energy Financial Services, although its lease will have the domino effect of creating open space at GE EFS”™ 120 Long Ridge Road address.
There appears to be no similar major machinations in Danbury to explain the sudden glut of office space, according to Jim Fagan, senior vice president of Cushman & Wakefield. More probably, he said, landlords have been consolidating space to open up additional room to lure new tenants.
What”™s more, Danbury economic development head Wayne Sheppard said he has had initial contact with a company interested in constructing a building in Danbury, which he would not identify saying the talks were too preliminary.
Danbury would need such space to have any hope of attracting a major corporate employer such as Pepsi Bottling Group Inc., which confirmed last year it is considering its leasing options, not to exclude a potential relocation from its present headquarters in Somers, N.Y.
At the time, Danbury officials said the company was considering locations in Danbury ”“ the second time in eight years the PepsiCo Inc. affiliate would be doing so ”“ but added the city is operating at a disadvantage due to a lack of large, contiguous blocks of space.
The nine-building Danbury Corporate Center complex, the former home of Union Carbide that accounts for nearly half the class A office space in Danbury, currently has 330,000 square feet of space available.
No one block of space totals more than 90,000 square feet, according to owner Grubb & Ellis, but the firm is currently marketing virtually the entirety of three buildings totaling more than 210,000 square feet of space. Additional smaller blocks of space are available in Danbury Corporate Center, whose buildings are conjoined with a central core for parking and amenities.
Is Grubb & Ellis positioning Danbury Corporate Center to accommodate a major new tenant? The company”™s Stamford-based brokers could not be reached for comment. But their efforts could go a long way toward restoring the former Union Carbide quarters to nearly full occupancy ”“ while whittling away at that nettlesome vacancy
