Commercial real estate leasing was down significantly in the first half compared to the same period in 2011, according to Cushman & Wakefield, but the vacancy rate still declined.
Fairfield County”™s overall leasing activity totaled just over 850,000 square feet, a 24 percent decrease from the 1.1 million square feet leased in the first half of 2011. It was the second lowest half-year leasing total in the past decade, with Fairfield County averaging 1.4 million square feet leased at midyear during that stretch.
New York City similarly saw muted action compared to previous years, according to Cushman & Wakefield.
In Fairfield County, deals for upper echelon, class-A office space was off more than 40 percent to under 400,000 square feet of space. Large new deals during the second quarter included:
Ӣ Freepoint Commodities, which took 59,000 square feet at 58 Commerce Road in Stamford;
Ӣ Millward Brown, which leased 51,000 square feet at 401 Merritt 7 in Norwalk;
Ӣ GE Capital Real Estate, which expanded into 50,000 square feet at 901 Main Ave. in Norwalk; and
Ӣ Tronox Ltd., which moved its headquarters from Oklahoma City to a 27,000-square-foot office at 263 Tresser Blvd. in Stamford.
At nearly 21 percent, Fairfield County”™s overall, class-A vacancy rate was consistent with both the first quarter of 2012 and the second quarter of a year ago. If still a historically high vacancy rate, a significant portion of the vacancy rate is pegged to a few large buildings, whose owners are hoping to land big tenants ”“ most notably Building and Land Technology (BLT), whose 695 E. Main St. adds more than a half-million square feet of space to the market as it undergoes renovations.
In the second half of last year, UBS AG put more than 150,000 square feet of space up for sublease at 400 Atlantic St. and 201 Tresser Blvd., while Legg Mason shopped around some 50,000 square feet it leases at 100 Stamford Place.
“In theory, quite a few 10-year transactions that were signed in 2003 should have been up for renewal this year,” said Jim Fagan, senior managing director and market leader of Cushman & Wakefield”™s Fairfield County and Westchester County regions, in a prepared statement. “With the difficult economy over the last few years, however, a number of early renewals and blend-and-extend transactions have taken some of the vitality out of leasing activity this year.”
The overall picture is one of vitality, however, as BLT continues filling out its Harbor Point development in Stamford”™s South End; as Chelsea Piers, NBC Sports Group and the NHL Network create a bustling sports hub at 1 Blachley Road in Stamford; and as Stamford Hospital accelerates construction plans on a new facility on the city”™s West End.
Greenwich could see its own action, after the onetime General Reinsurance Corp. headquarters at 600 Steamboat Road went back onto the leasing market after extensive renovations to the
180,000-square-foot, harbor-side building. The landlord wants more than $100 a square foot, according to Cushman & Wakefield, helping to push Greenwich”™s average asking rent to approaching $69 a square foot, up from under $56 a year ago. Greenwich”™s vacancy rate was more than 21 percent, up nearly 2 percent from the first quarter this year.
A significant amount of renewal activity was another indication of a down market, according to Cushman & Wakefield. Major renewals included:
Ӣ GE CapitalӪs 66,000-square-foot renewal at 83 Wooster Heights Road in Danbury;
Ӣ Bridgewater AssociatesӪ 32,000-square-foot lease at 355 Riverside Ave. in Westport;
Ӣ Verition Fund ManagementӪs
27,000-square-foot renewal at 1 American Lane in Greenwich; and
Ӣ McGladreyӪs 26,000-square-foot deal at 850 Canal St. in Stamford.
Three major sales occurred in the second quarter, after Torchlight Investors took control of the former UST headquarters building from Antares Investment Partners; ClearRock Properties spent $19 million for Holly Hill Lane in Greenwich; and Marcus Partners bought 6 Armstrong Road in Shelton for about $8 million.
