Fairfield County’s office market recorded 262,737 square feet of leasing activity during the third quarter, according to data published by CBRE (NYSE:CBRE). This represented an 18% decline from the second quarter and was 38% below the five-year quarterly average, as well as the lowest total since the second quarter of 2020.
During the third quarter, only one new transaction was greater than 20,000 square feet – Key Bank of New York’s 20,406-square-foot lease at 3 Corporate Drive in Shelton. Six of the top 10 transactions during the third quarter were renewals, most notably the 103,713-square-foot transaction involving Purdue Pharma at 201 Tresser Blvd. in Stamford.
CBRE noted that third quarter leasing activity was concentrated in Class A space, accounting for 76% of transactions. The Stamford Central Business District (CBD) had the greatest level of activity among the county’s submarkets, with 90,000 square feet of transactions. Still, that submarket was down 54% from the previous quarter and down 43% from the five-year quarterly average.
The other submarkets across the county had mild levels of activity – Central Fairfield generated 55,000 square feet, Fairfield East notched 44,000 square feet (with the aforementioned Key Bank deal fueling more than half of that total), the Greenwich CBD recorded 26,000 square feet, the Greenwich non-CBD saw 22,000 square feet, Fairfield North with only 19,000 square feet, and the Stamford non-CBD trailing at 6,000 square feet, its lowest level since the second quarter of 2020.
The third quarter’s availability rate dropped by 120 basis points from the second quarter to 26.2%. Net absorption was roughly 473,000 square feet, mostly because of the withdrawal of 457,000 square feet at 1 Elmcroft Road in Stamford, which is being positioned to become a multifamily development.
Four of the county’s seven submarkets recorded positive net absorption, led by the Stamford CBD at 595,000 square feet – a situation primarily sparked by the 1 Elmcroft Road project. Availability in this submarket declined by 570 basis points from the second quarter to 23.7%, its lowest level since the fourth quarter of 2019.
The three submarkets with negative absorption were Central Fairfield with negative 164,000 square feet, driven by activity at Merritt 7 and 45 Glover Ave., both in Norwalk; the Stamford non-CBD with negative absorption of 58,000 square feet, due mostly to a combination of available space at 470 West Ave. and very low leasing activity elsewhere; and the Greenwich CBD with negative 19,00 square feet.
Fairfield County’s average asking rent for office property in the third quarter was $35.13 per square foot, down 2% from the second quarter and down 1% from one year ago. Only two submarkets recorded significant shifts during the quarter: the Greenwich CBD saw the average asking rent fall 5% to $108.80 per square foot (although rent was up 20% from one year ago) and the Central Fairfield submarket recorded a 2% dip from the previous due to downward repricing on 190,000 square feet of space at Norwalk’s 800 Connecticut Ave.