CB Richard Ellis finds the market recovery continuing to improve in the third quarter.
The largest indicator to come out of the third quarter report for CB Richard Ellis”™ was the year-over-year overall square footage leased, up to 2.5 million square feet from 1.8 million square feet last year.
“You”™re seeing improvement in both the large deals and number of transactions being done,” said Robert Caruso, senior managing director of CB Richard Ellis”™ Westchester/Fairfield County operation. “We”™re sitting better than many markets in the area and the country.”
Caruso said there are trends in tenants looking to trade into better space as well as a reduction in space through renewal and relocation.
“Anytime you get vacancies in qualities building, people want to take advantage of the opportunity to find good space, said Caruso. “Another trend you”™re seeing is a lot of sublease space down to 17 percent from 25 percent, that”™s a change in the positive direction, and that”™s more noticeable in Stamford. There you”™re putting the space back into the hands of the landlords who have the ability to make deals; it”™s more challenging to lease sublease space even though it”™s at a lower cost.”
In the report the top Fairfield transactions were listed as GE Asset Management at 1600 Summer St. in Stamford with 158,605 square feet, Bridgewater at 300 Nyala Farms Road in Westport with 59,132 square feet, and Elizabeth Arden 200 First Stamford Place in Stamford with 49,772 square feet.
Caruso said those deals are indicators and will lead the way as the labor market improves.
“You are also seeing a trend of national headquarters moving into Stamford,” said Caruso.
“Between Affinion and Starwood, it”™s definitely a trend you”™re seeing that you hadn”™t seen for quite some time.”
Caruso said the companies are coming for different reasons, the first for a rare high quality sublease at a lower cost and the other for tax incentives.
The report also released information that Two Harbor Point, a redevelopment project initiated in Stamford”™s south-end shortly before the start of the recession, has secured it first tenant, McKinsey & Company, Inc.
“Nielsen also had a big move in Wilton in the central market and Knight Capital Group in Greenwich expanded,” said Caruso. He said the central market did very well between Norwalk, Westport and Wilton.
“The number of deals is up 40 percent and on average square footage is up 100 percent,” said Caruso.
Though the vacancy rate rose a percentage point, according to the quarterly report, the availability rate remained relatively the same year-over-year, having risen only a tenth of a percentage point.
The report showed tenant improvements allowances falling from around $35 per square foot to $29 per square foot.
