Mostly rosy picture at Southern Connecticut Building Owners’ ‘State of the Market’ meeting
The real estate market being tilted in favor of tenants, the continued strength of Stamford and the obstacle to development that is the state of Connecticut”™s transportation system were the main themes of The Southern Connecticut Building Owners and Managers Association”™s annual “State of the Market” panel discussion, held Jan. 30 at The Waters Edge at Giovanni”™s in Darien.
Moderated by James Ritman, executive vice president, managing director at Newmark Knight Frank in Stamford, the well-attended event featured BLT co-President Ted Ferrarone, Stamford Director of Economic Development Thomas Madden and CBRE Executive Vice President Tom Pajolek assessing the area landscape.
Noting that the county”™s office market had just over 2 million square feet in leasing activity last year ”“ with WWE”™s 16½-year lease for the 415,000-square-foot, three-building complex at 677 Washington Blvd. in Stamford accounting for most of that ”“ Pajolek said that figure was still about 20% less than five years ago.
Nevertheless, he said, the fact that Stamford”™s Central Business District, which includes Washington Boulevard, accounted for half of the region”™s total leasing “speaks very well of the attractiveness” of that area: “More people are coming in to Stamford than go out every morning.”
Meanwhile, Pajolek said, the availability rate in Greenwich”™s CBD finished 2019 at 16%, compared with what he called an all-time low of 8% just a couple of years ago. “There”™s a whole bunch of space available around their train station,” he said.
Countywide, the availability rate remained essentially flat quarter over quarter, at 23.6%. “It”™s a tenant”™s market,” Pajolek said.
Ferrarone noted that WWE and Charter Communications ”“ in the midst of constructing a new two-building headquarters on Washington Boulevard ”“ are reflective of how employers are catering to a new breed of employees, who don”™t want a long commute and prefer retail, dining and other amenities near where they live.
Pajolek took up the subject, listing numerous projects that are getting, or have recently received, a “facelift,” largely to attract young workers: 45 Glover Ave. and Merritt 7 in Norwalk, and Washington Boulevard and Stamford Plaza in that city among them. Pajolek also cited the renovations going on at The Summit at Danbury, formerly the Matrix Corporate Center, as a positive sign.
“We”™re all upping our games because of what tenants are demanding,” he said.
Madden said Stamford is focusing on five key industries: digital media, financial services/real estate, government services, food and beverage, and especially biotech. He said that the city continues to benefit from luring New York City firms to Stamford, including ITV America and Cholula Hot Sauce, as well as Canidae Pet Food, which is relocating its headquarters from Norco, California.
The talk then turned to Norwalk”™s SoNo Collection mall, and the near-simultaneous announcement that the Stamford Town Center is being put up for sale. “I”™m very, very relieved that that site (SoNo) was put to good use,” Pajolek said. “I have some concern about surrounding retail, but overall it should invigorate the marketplace.”
Repeating that Stamford Town Center will not be occupied by UConn, Madden noted that selling the 853,000-square-foot mall at 100 Greyrock Place requires signoffs from five parties: Macy”™s, which owns its pad site; Realtor Reckson, which also owns part of the site; the Stamford Urban Redevelopment Commission, which owns Center Drive, the mall”™s ramps and helix structure; mall owner Taubman Centers; and the city of Stamford, which owns the land under the site”™s parking structure.
Nevertheless, Madden said, the city “is pretty much ready for a new owner to come in and present.” He expressed confidence that Stamford”™s zoning and planning boards will “do what it takes” to push the sale through, provided the right terms are involved.
The mall had an 83% occupancy as of mid-January, he said, compared with more than 94% in downtown.
Looking to this year, all three panelists said that repurposing long-vacant properties ”“ especially those not located in central business districts ”“ were high on their agendas. “There”™s a lot of office space that should probably not be office anymore,” Ferrarone said.
Returning to the subject of UConn, Madden said the university”™s Stamford dorms are already 100% occupied and he expressed hope that further expansion could be in the cards. “Why go to Storrs (where UConn is based) when all the jobs are down here?” he asked.
Agreeing that the state of Connecticut”™s roads and rail system are in desperate need of improvement, the panelists said that, should it succeed, Gov. Ned Lamont”™s “30-30-30” plan ”“ a goal of 30-minute travel times by rail between Hartford and New Haven; New Haven and Stamford; and Stamford and New York City ”“ would be a godsend.
“Stamford could become the sixth borough of Manhattan,” Ferrarone averred, saying that “nothing would be more transformative” to the area than improved train service and the presence of a major public university. Pajorek also said better train service would relieve some of the notorious traffic congestion on I-95.
The event also saw the official elevation of BOMA”™s vice president ”“ Tom Izzo, manager at Stamford realty firm 400 Atlantic ”“ to the presidency, with the expiration of the term of Maureen Dobbins, vice president and director, business development at Hoffmann Architects in Hamden.