In a recent survey of senior executives in the commercial real estate industry by KPMG L.L.P., 36 percent of respondents identified the Northeast as the best region for commercial real estate investment opportunities.
While new office developments are uncommon in the Fairfield County region, industry experts say the market is ripe for capital investment and upgrades.
That is evident in Norwalk, where the partners behind Merritt 7 Corporate Park are looking to modernize the property and add amenities, and in Stamford, where George Comfort & Sons Inc. is in the midst of a major renovation of Shippan Landing, a waterfront development in need of “a little tender love and care.”
Marcus Partners and Clarion Partners are about two-thirds of the way through a two-year, $15 million renovation of Merritt 7 and in June celebrated the reopening of 301 Merritt 7. In all, the park features six buildings and 1.4 million square feet of Class A office space.
The upgrades are focused on building interiors, such as plazas, entryways, main lobbies, corridors and restrooms; outdoor features, such as landscaping, plaza lighting and seating; and park-wide measures, such as the construction of an executive conference center and addition of a security system with a central command station.
In building 301, the project included a transformation of the main lobby; the addition of a Starbucks café and an executive dining and conference room; and upgrades to the existing cafeteria, conference center and fitness facility.
David P. Fiore, a principal of Marcus Partners, said that independent of the current project, capital improvement work at Merritt 7 is “an ongoing thing.”
The current project is not as much the result of economic opportunity as it is the result of always wanting to stay ahead, Fiore said. “I think really it is the desire to maintain, to be the iconic Fairfield County office park, and to do that you”™ve always got to stay a step ahead of everybody else.”
But, he said, location still trumps capital.
“Some properties don”™t have the great location, and therefore you can renovate them all you want and they”™re not going to compete,” he said.
Fiore said Marcus and Clarion have done “a tremendous amount of leasing” and that there are a number of deals in the pipeline. “Last year alone we did over a half million square feet of leasing in both new leases and renewals.”
While Fiore said that won”™t be the case at Merritt 7 every year, he said there is currently a lot of turnover within Fairfield County that could represent an advantage for more up-to-date properties.
Occupancy at the property is about 90 percent, Fiore said, with tenants like EMCOR Group, FactSet Research Systems, General Electric Co., Siemens and others.
In Stamford, renovations are progressing quickly at Shippan Landing, a six-building, 780,000-square-foot Class A development owned by George Comfort & Sons and Angelo, Gordon & Co. that was previously called Harbor Plaza.
In a previous interview, Peter S. Duncan, CEO and president of New York City-based George Comfort, said that with “a little tender love and care, we should put this (property) back to where it should be” in the marketplace.
Renovations to 290 Harbor Drive, at 185,000 square feet, are nearly completed and the building is expected to be ready for occupancy within two to four weeks, said Paul Jacobs of CBRE Inc., the firm marketing Shippan Landing. The $40 million project is expected to be completed by the end of 2013 or early 2014.
The project includes the replacement of all of the complex”™s windows, various mechanical systems in at least two buildings, as well as upgraded entryways and lobby spaces. At the property”™s smallest building, 232 Harbor Drive, office space is being replaced with amenities such as a cafeteria, conference center and gym.
The developers, along with CBRE, held an open-house event last week to show off the upgrades. “It”™s one thing to market a building from renderings, but it”™s an entirely different game when you”™re marketing the building from a finished product,” said Jacobs, an executive vice president with CBRE”™s Stamford office.
“We”™re looking at different day care options, we”™re looking at putting a high-end restaurant into the park ”” a destination type of restaurant,” he said. “So we”™re looking at providing every conceivable amenity that makes sense.”
Those amenities include water views. While the office complex may not be within walking distance of the downtown, the developer provides a shuttle service to the train station and the resulting views are unmatched, Jacobs said.
“You tell me when you see the space and the views overlooking the Stamford waterfront whether or not it”™s a disadvantage,” he said. “If you want to be within walking distance of the train, clearly it”™s a disadvantage. But if you want a true waterfront view of the Stamford harbor, then you get to this space and look out and say ”˜Holy cow, this is just unbelievable.”™”
