The regional commercial real estate market, which took a thumping in the recession, continues to reinvent itself amid healthier times. It has found, in the words of CBRE Senior Managing Director Robert Caruso, “a new normal” that has stabilized 30 percent below prerecession leasing activity.
Popular properties are those that have been spruced up and those that are near transportation ”” or perhaps near land to grow, a pharmaceutical campus linchpin. Those buildings with medical-ready infrastructure, too, are popular; though while medicine and business may be intertwined, they usually prefer different building addresses.
In comparing Westchester and Fairfield counties, Fairfield fared better statistically in the third quarter, increasing leased square footage by 57 percent. Westchester dipped 38 percent compared with the third quarter of 2013, which, at least in part, is because Westchester is the longer-developed county and its buildings are older.
“Westchester saw more repositioning and removal of obsolete properties from the market,” Caruso said.
Caruso and a battery of CBRE executives ”” including Tom Pajolek, executive vice president; Kevin McCarthy, vice president; Khadija Kay Licata, director of research services; David Block, senior vice president; Johanna Clark Wendt, manager for marketing and communications; and Steven Fiore, research analyst ”” recently parsed the Westchester and Fairfield county third-quarter commercial real estate data at CBRE”™s Tresser Boulevard, Stamford, office.
Fairfield was the costlier of the counties for the quarter on average: $35.83 per square foot (down from $37.04 in the third quarter of 2013), compared with Westchester”™s $27.34 per square foot (up from $26.85 a year ago).
Block, who is leasing agent for the silver-sheathed 400 Atlantic St. in Stamford, said, “You cannot overstate the impact of Connecticut”™s incentives, which can make rent differentials fairly insignificant.”
The assembled agreed Fairfield”™s numbers are skewed higher by $80-per-square-foot Class A spaces in Greenwich.
Each county scored victories in the quarter.
In Fairfield County, Sikorsky Aircraft Corp. leased 92,109 square feet at 1 Far Mill Crossing in Shelton; General Electric leased 42,737 square feet at 601 Merritt 7 in Norwalk; and Unilever leased 29,786 square feet at 3 Corporate Drive, Shelton.
In Westchester, First Niagara Bank leased 30,000 square feet at 520 White Plains Road in Tarrytown; Mariner Investment Group leased 16,556 square feet at 500 Mamaroneck Ave., Harrison; and Regus Business Centers leased 15,000 square feet at Yonkers”™ Ridge Hill development.
Fairfield County”™s overall leasing activity of 2.3 million square feet for the quarter bested the third quarter of 2013 by 800,000 square feet, a 57 percent improvement.
In Westchester, demand was light, according to CBRE, with third-quarter leasing activity down 38 percent year over year (244,570 square feet versus 394,990 square feet). The year-to-date figure of 969,934 square feet is 31 percent below its corresponding 2013 number of 1.4 million square feet.
Westchester, however, has less leaseable, available office space, 18.7 percent (up 1 percent compared with the third quarter of 2013), while Fairfiled”™s availability rate is 20.9 percent (up from 20.2 percent a year ago).
A lot of landlords, it emerged, want to know if their buildings possess the infrastructure ”” “the bones” in the parlance of those at the meeting ”” to take in medical practices.
Those landlords are hearing it is not as simple as it sounds, nor, necessarily, as desirable. Medical and business/corporate offices tend not to mix. Medical offices require more plumbing and multiple exam rooms. They also require five or six parking spaces per thousand square feet of office, compared with the three to four spaces nonmedical businesses.
CBRE provided a raft of commercial real estate numbers that included positive absorption figures of vacant property for both counties: a positive absorption of 86,717 square feet in Fairfield and 14,813 square feet in Westchester.
