Even as Stamford”™s official vacancy rate continues to top 20 percent, brokers say tenants are beginning to lose some of their leverage due to much of that space located in buildings not being actively marketed for multi-tenant use ”“ not yet, anyway.
Many companies starting the hunt for new quarters do not realize the market has tightened over the past few months, according to James Fagan, senior managing director in the Stamford office of Cushman & Wakefield.
Bolstering that argument, Cushman & Wakefield reported that leasing activity in New York City in the fourth quarter was the highest in four years, with the suburban markets typically following Manhattan”™s lead with varying degrees of lag.
Other types of real estate are seeing increased action as well as institutional funds pick up their investment activities ”“ in late January, the national financial services organization TIAA-CREF bought the Newbury Common apartment building at 1450 Washington Blvd. for $62 million from Seaboard Properties Inc., nearly two years after Seaboard bought it for $37.7 million from the Connecticut Housing Finance Authority.
“A lot of the vacancy in Stamford is in a few pockets,” Fagan said. “If you take five buildings out of the equation now ”¦ the vacancy goes from 22 percent to 13 percent.”
Most prominent among those buildings is 695 E. Main St., the erstwhile headquarters of General Reinsurance Corp. that is now being readied for multi-tenant use in a multimillion-dollar renovation by New York City-based L&L Holding Co. L.L.C.; and Building & Land Technology”™s office buildings under construction in the Harbor Point district of Stamford, which have had success drawing tenants despite carrying what brokers say are the highest lease rates in Stamford.
As 695 E. Main Street undergoes an overhaul, RFR Realty L.L.C. continues to benefit in its portfolio of seven Stamford buildings totaling 1.8 million square feet of space. RFR recently inked a lease for nearly 50,000 square feet of space for Greenwich insurance carrier W.R. Berkley Corp., a deal encompassing two floors.
RFR”™s occupancy rate in Stamford is above 90 percent according to Margaret Carlson, the company”™s portfolio director in Stamford; though as of late January an RFR website listed 16 percent of the company”™s space as available, a total that may include leases coming up for expiration in which a tenant could still choose to stay put.
Alan Peterson, co-founder of Choyce Peterson in Stamford, sees the same trends as Fagan ”“ literally. Choyce Peterson last month published the second installment of silhouette charts that illustrate vacant spaces floor-by-floor in major buildings in Stamford, Greenwich and Norwalk, along with offices that are under sublease.
“You see 695 East Main Street as a big block of yellow, Harbor Point as a big block of yellow,” Peterson said. “RFR did wonderful things in terms of tightening up their buildings with the tenants that were in the exodus from 695 East Main. Once 695 East Main opens, they are the landlord that will be most threatened.”
Carlson does not disagree with that assessment, but said that RFR has carved out a reputation as an accommodating landlord ”“ including its ability to offer discount apartments at its Canterbury Green building in downtown Stamford.
