The Fairfield County commercial real estate market ended the year on an up note, according to a new report.
“The fourth quarter showed a steady flow of declining availability rates and increased leasing activity,” said Cory Gubner, CEO of Rhys real estate in Stamford.
The company”™s fourth quarter State of the Market report found the amount of available sublease space declined by 35 percent over a year earlier.
“Tenants have really showed some strong confidence in the market, signing long-term leases for large blocks of space,” Gubner said.
The report found in Fairfield County, availability rates declined to 21.4 percent during the fourth quarter of 2010, from 22 percent in the third, but increased from 20.3 during the same period last year. The southern and central submarkets had the highest availability rates at 25 percent and 23 percent, respectively.
The amount of direct available space remained just under 10 million square feet, while sublease space decreased to 1.5 million square feet, the lowest level since the 3rd quarter of 2008. Much of the high quality sublease space that flooded the market during 2009 has been leased by tenants looking to upgrade from their current space and lock in to reduced rental rates.
“Fewer large blocks of space have been added to the market this quarter compared to the first three quarters of the year,” Gubner said.
Space additions were also more widespread across the county, he said, rather than concentrated in one particular submarket, reflecting a return to more normal market activity.
The Rhys report found net absorption, the difference of the space leased and the space vacated in an area, to be negative across all submarkets in the Fairfield County region with the exception of the northern submarket where 22,663 square feet was absorbed. Net absorption was negative for the entire year, with the most space being returned to the market during the first quarter of 2010.
“For the first time this year, the Fairfield County region experienced significant lease transactions across all four submarkets,” Gubner said. “Leasing activity in the southern submarket continued to dominate, accounting for 40 percent of the activity this quarter; central submarket accounted for nearly 30 percent.”
The positive uptick at the end of 2010 was noted farther south in Greenwich as well.
Ron Brien, director of commercial leasing for MH Heaven Real Estate L.L.C. in Greenwich, said there was notable leasing activity in the Greenwich district in the final quarter of 2010.
“It seems like the numbers have doubled since the third quarter,” Brien said.
The Rhys report found leasing numbers to be 64 percent higher than the fourth quarter of 2009.
“There has also seemed to have been a lot of relocations going on,” he said. “Tenants were much more confident and more willing to sign long-term leases for some still good rental rates.”
The Rhys report stated, “the surge in leasing activity should translate into positive net absorption during the first half of 2011.”
Gubner said compared with its affluent cousin in New York, the Fairfield County market fared better than the Westchester County market at the end of 2010 with signs of self-sustaining momentum.
