After an eerily quiet first quarter Stamford”™s central business district is transforming and extending itself south, while the BLT Harbor Point project looks to be the focal point of the city”™s new transportation-centered landscape.
According to the “CB Richard Ellis Fairfield County Statistical Report,” the availability rate in Stamford”™s central business district is up to 22.57 percent compared with 22.02 percent in the last quarter of 2010 and 20.55 percent in the first quarter of last year.
Jones Lang LaSalle, which defines the city”™s business district with a slightly broader brush, showed a parallel rise in vacancy from 23.6 percent compared with 23.1 percent in 2010”™s final quarter.
Both real estate companies found the nearly 60,000 square that have already been rented to Towers Watson at 4 Landmark Square and to StatOil at 1055 Washington Boulevard have weakened commercial fundamentals in the Stamford central business district. Those deals are subleases.
“Those two subleases couple with stagnant demand really drove up the vacancy rates,” said Erin Patterson, senior associate analyst at Jones Lange LaSalle”™s Stamford office. She said the direct class A space itself showed positive absorption for Q1, totaling 24,266 square feet, indicating some degree of recovery in the class A market.
“When you”™re looking at the Stamford CBD (Central Business District), you”™re really looking at two separate things,” said Patterson. “There”™s the RFR Realty portfolio and then the rest of the market. It”™s within the RFR portfolio that you are seeing the bulk of leasing occur. The competitive part of the market is really RFR”™s share.”
Stamford again topped the CB Richard Ellis top lease transactions for the year with Starwood Hotels and Resorts, Nestle Waters, and GE Asset Management all taking more than 150,000 square feet of space.
“That”™s a sign we have a great year to look forward to in Stamford,” said Patterson.
Tom Pajolek, senior vice president of CB Richard Ellis Brokerage Services, said in the first quarter Stamford has begun to resettle its business district”™s center closer to the train station and I-95.
“It is worthwhile to say that the center of Stamford has migrated from Summer Street to the more mass transit-centric areas, putting Harbor Point in the center of the new landscape of Stamford”™s business district,” said Pajolek.
Patterson said the ever emerging shift of the central business district to closer ton I-95 and the railway has been evolving for some time and even prompted Jones Lang LaSalle to revamp its research specifications in the area in 2009 to include area south of I-95.
In the year end of 2010, the average asking rent per square foot was nearly exactly the same as at the end of 2009 in the Stamford central business district: around $38. The area was the only market in Fairfield County that did not post a rise in rate over the past year.
Pajolek said though the vacancy rates rose, the asking rent rates were consistent with last year”™s because the lower price space has been leased and new space comes online with higher asking prices.
“It”™s not necessarily the prices that people are going to take, but there is that migration that makes asking prices go up,” said Pajolek. He said the raised pricing has made for a slow first quarter of 2011, but not without something to look forward to.
“From my standpoint, things are going to loosen up in a large way for a strong second quarter,” said Pajolek. “You”™re going to see a whole lot of activity as the year goes on.”
Pajolek said Harbor Point”™s emerging space has all of a sudden allowed the city”™s mass transit to be a viable option for more and more commuters, and that spaces demand and lack of supply is being reflected in leasing.
Pajolek said part of the reason the market seems so flat in this quarter is the vacancy of the Gen-Re building on Main Street, which the company moved from in January 2010 in favor of space on Long Ridge Road farther north. The property is currently on the market and vacant while ownership details and refurbishment possibilities are discussed.
“A lot of people have their eyes on what goes on at that space,” said Pajolek. He said an amount of rehabilitation will go on there as the ownership is ironed out.
“They will be having their eyes on a major tenant to take that space, but a certain amount of investment will have to be made.”
