A robust first-quarter commercial real estate market report from Newmark Grubb Knight Frank also foresaw a surge in available space on the near horizon in Fairfield County.
James H. Ritman, the executive vice president and managing director of the Manhattan-based commercial real estate services firm, which has offices in Greenwich and White Plains, said county office market occupancy increased substantially last year for the first time since the recession. Occupancy increased by 36.2 percent, to 4 million square feet, from 2013, the report said.
The first quarter saw 1 million square feet of deals, up 42 percent year-over-year, but new supply sent the availability rate higher and net absorption back into negative territory. That could continue, with more than 1.1 million square feet expected to become available in the next year, Ritman said.
However, Ritman said in the report that 2015 will be another healthy year of office leasing due to local government initiatives and activity in all aspects of real estate.
Ritman said local government officials, including Thomas Madden, the new Stamford economic development director, are making efforts to diversify the tenant base in the county. He also called attention to the state government, which gave tax credits and financial incentives to Starwood Hotels & Resorts Worldwide for its global headquarters expansion at Harbor Point in Stamford last year, and gave funding to Norwalk-based data company Datto for its third expansion lease at the Merrit 7 complex.
He said Datto is part of the recent trend of rapidly growing technology companies filling in gaps the shrinking financial industry has left behind. At the end of last year, there were more than 5,535 tech companies in the state with a total payroll of $6.1 billion, Ritman said.
Ritman said he expects developments in technology, retail and housing to draw more employers into the area. Institutional and foreign investors and developers are flocking to the area”™s multifamily market, he said. Since 2011, nearly 6,000 units were developed in Fairfield County, with more than a third, or 2,170 units, completed last year alone.
In Stamford, more than 900 units were completed within the last year, including Beacon Harbor Point, and about 500 units are under construction. The Waypointe district in downtown Norwalk will include more than 1,000 apartments when fully developed. In Danbury, Stamford-based Building and Land Technology recently opened a 100-unit addition to the Abbey Woods complex.
The Norwalk and Danbury districts offer large blocks of space for retail, Ritman said. Street retail vacancies in Westport, Greenwich and New Canaan are decreasing from unprecedented highs during the recession, according to Ritman.
Local landlords, such as BLT, are repositioning their properties to appeal to a variety of occupants, Ritman said. BLT transformed a nearly 600,000-square-foot single-tenant property in Stamford into a building that can hold multiple tenants, called the BLT Financial Centre. Last year, Deloitte signed an 117,000-square-foot, 15-year lease at the property.
Other new developments include Del Frisco”™s Grille in Stamford, Betteridge Jeweler”™s expansion in Greenwich and General Growths Properties”™ proposal for a 700,000-square-foot regional retail center in Norwalk.
