For the fifth quarter in a row office space availability in Fairfield County continued to shrink mid-way through this year, according to second quarter 2025 figures from CBRE. It represented the longest sustained period of contraction since 2017-2018.
The availability rate was 25%, down 40 basis points (bps) quarter-over-quarter and 120 bps from a year ago. Quarterly net absorption was positive 130,000 square feet, bringing year-to-date absorption to positive 644,000 square feet.
Actively listed sublease space has also shrunk dramatically, falling from a second quarter 2022 peak of 2.5 million square feet to 1.2 million square feet today. Although, some of this space has been brought back on a direct basis or removed due to conversions, the tightening in availability can also be attributed to strong leasing activity, according to David Block, CBRE executive vice president based in Stamford.
“It’s multiple quarters in a row of declining availability and positive absorption,” Block told the Fairfield County Business Journal. “We have a lot more space being removed from the market that is coming on the market. And that’s a positive development.”
Also, Fairfield County has now experienced five consecutive quarters of over 400,000 square feet of leasing activity, down 7% quarter-over-quarter. Renewal activity amounted to 227,000 square feet, down 6% quarter-over-quarter.
“Most of it is tenant movement,” Block said. “We have seen a lot of flight to quality. As tenants have figured out what their real estate footprint looks like going forward – and it’s taking companies quite a bit to figure it out – in the post-Covid world.”
Quite a few companies have left suburban assets to move to business districts close to the train and downtown, Block added. He said although it increases their price per square foot such moves lower their footprints and don’t really increase their real estate costs.
Fairfield East
The Fairfield East notched the most leasing activity out of Fairfield County and made up 29% of Fairfield County’s quarterly leasing. The submarket notched 118,000 square feet of leasing activity, up 52% from the prior quarter and 76% above its five-year quarterly average. The surge in leasing was driven by deal volume in Shelton, which accounted for 105,000 square feet of the submarket’s 27 new leases.
Greenwich and Stamford rent
As for rents in Fairfield County, the average asking rent was $35.69 per square foot, down 1% quarter-over-quarter and up 1% from a year ago.
Greenwich commercial business district remains one of the strongest submarkets in the country, with an asking price of $107.82 per square foot and an availability rate of 8.4%. The submarket’s quarterly activity was driven primarily by Northern Trust’s 11,000 square feet lease at 55 Railroad Ave.
The city of Stamford saw the four largest deals of the quarter, three of which were renewals. First County Bank at 3001 Summer St., Morgan Stanley at 4 Landmark Square and Cummings & Lockwood’s three floor renewal at 6 Landmark Square made up a substantial portion of Fairfield County’s second quarter renewal activity.
Due to the pricing decreases of available space at 1111 Summer St. and 60 Long Ridge Road, Stamford’s NCBD average asking rent decreased by 3% from the first quarter to $33.29 per square foot. The submarket’s surplus of space has forced building agencies on the city’s outskirts at High Ridge Park and offices along Long Ridge Road to lower their asking prices in an effort to secure new tenants.
Future activity
As for the rest of 2025, Block envisions a slowdown in the third and fourth quarters based on what he has observed in the number of first-half tours of office space by prospective tenants.
“2024 was great and the first quarter of 2025 was moving in a positive direction,” he said. “But quite honestly, starting in the second quarter, the number of new tours absolutely decreased. If we see a slowdown in office tours, it generally leads to a slowdown in leasing in the next couple of quarters.
“I attribute that to uncertainty in the economy, delayed decision-making. We believe the market will catch up and there will be pent up demand that will be satisfied. But I don’t expect an incredibly strong second half of the year.”
However, Block was still optimistic.
“I am relentlessly optimistic,” he said. “I don’t think this is a disaster for the market, just a temporary slowdown.”
