Leasing activity lightly tapped the brakes in Fairfield County in the third quarter, according to a raft of commercial real estate metrics from CBRE that analyzes the Fairfield and Westchester markets, called its MarketView Snapshot. Other metrics trended north and the traction of the recovery was reinforced by higher rents on existing properties.
Despite leasing having cooled in Fairfield County, it remained on a par with Westchester”™s newfound leasing robustness. Fairfield rents, however, remain about $10 per square foot higher than in Westchester.
Commercial leasing for 3Q in Fairfield County totaled 1.46 million square feet, on par with 3Q 2012”™s 1.5 million square feet, but below 3Q 2011”™s 1.9 million square feet.
Westchester, meantime, witnessed a surge in leases. In 3Q, commercial leasing reached 1.4 million square feet. In 3Q 2012 that figure was 0.83 million.
The average asking rent continued to rise in 3Q 2013, increasing by nearly 4 percent to $37.04 per square foot in Fairfield County from 3Q 2012”™s $35.66 per square foot, “as landlords continued to increase prices for prime space already on the market,” CBRE reported. In Westchester County, the 3Q figure was $26.80 per square foot, basically unmoved for the past two years.
In Fairfield County, Stamford-based CBRE reported, “Steady occupancy gains helped strengthen the office market in the third quarter 2013. The overall market captured more than 248,695 square feet of positive absorption, bringing year-to-date net absorption to positive 120,021 square feet.”
Fairfield County”™s vacancy rate at 19.6 percent was half a percentage point better than Q3 2012”™s 20.1 percent and basically steady with Q3 2011”™s 19.7 percent.
The important “taking rent index” reached 88.9 percent for properties in 3Q, up from 86.9 percent in 3Q last year and 80.4 percent in 3Q 2011. This figure represents the base rent minus all concessions and electric as a percent of the asking rent.
The rent abatement is the time between the lease agreement and the first rent check. Fairfield County”™s lag time had been 3.2 months in 3Q 2012 and 3.3 months in 2011. The figure jumped to 5.69 months in 3Q 2013, just about equaling Westchester”™s metric for the category: 5.62 months in 3Q 2013 and 5.9 months for 3Q 2012.
Landlords also are sweetening their deals via the so-called tenant improvement allowance, with the “average based on new leases for space of 5,000 square feet or greater consummated over the past three months.” In Fairfield the figure had been $27 per square foot in 3Q 2012, but it hovered at $32.08 for 3Q 2011. For 3Q 2013 the tenant improvement allowance was $34.94.
Among its “key drivers,” CBRE reported leasing activity was concentrated in the central submarket in Fairfield County (26.10 percent) and eastern submarket, which captured 21.86 percent of the overall regional market. Meantime, the Greenwich submarket closed 3Q 2013 with its first quarter of positive net absorption since 2011, at 36,066 square feet. “However, the Greenwich submarket”™s year-to-date net absorption stands at negative at 22,352 square feet,” CBRE said.
And big deals continue to happen in the third quarter:
Ӣ Cannondale Sports Unlimited leased 50,977 square feet of space at 761 Main Ave., Norwalk ;
Ӣ Home Serve USA leased 46,529 square feet at 601 Merritt 7, Norwalk; and
Ӣ Navigators Insurance Group leased 36,782 square feet at 400 Atlantic St., Stamford.
