Leasing activity sinks in Fairfield County’s Q2 office market

Fairfield County”™s office market recorded 321,382 square feet of leasing activity during the second quarter of this year, according to a data report published by CBRE. This is 34% below the activity level in the first quarter and 31% behind the five-year quarterly average.

During the second quarter, approximately two-thirds of all leasing transactions occurred in the Stamford CBD submarket, reaching 196,000 square feet of activity. This is up 5% from the five-year quarterly average and was also up 5% from last year”™s year-to-date figure.

However, this submarket was lopsided in the scope of its activity with 73% of its leasing activity was centered at 400 Atlantic St., including the quarter”™s biggest transaction ”“ the 97,359-square-foot lease for Confidential Insurance Co. All the relocations to 400 Atlantic St. came from other properties in Stamford.

Leasing activity elsewhere in Fairfield County”™s office market was on the sleepy side during the second quarter. The Greenwich CBD recorded 23,000 square feet of activity, which is less than half of the first quarter”™s total and 45% below the five-year quarterly average. The Central Fairfield submarket”™s 56,000 square feet of activity was most fueled by Tenerity”™s 27,000-square-foot lease at 401 Merritt 7 in Norwalk, which was the quarter”™s second biggest transaction. And Northern Fairfield saw 8,000 square feet of activity, which was anemic compared to the other submarkets but was nonetheless a 36% year-over-year increase.

The quarterly net absorption for Fairfield County”™s office market during the second quarter was negative 248,973 square feet ”“ CBRE primarily attributed this result to the additions to 39 Old Ridgebury Road in Danbury. The availability rate increased to 27.4%, up 70 basis points (bps) from the first quarter but down 30 bps from one year ago.

Five of the county”™s seven submarkets experienced negative absorption. Fairfield North”™s availability soared by 790 bps from the first quarter to 20.1%, its highest level since the third quarter of 2020. Fairfield East saw a 120-bps uptick to 26%, a 10-year high. Only the Stamford CBD and Central Fairfield submarkets recorded positive absorption.

During the second quarter, Fairfield County”™s average asking price for office rent was $35.71 per square foot, which was flat from the first quarter and up 2% from one year earlier. Within the submarkets, however, asking rent averages varied ”“ the Greenwich CBD saw an 11% increase in $114.35 per square foot while Fairfield North only experienced a 3% quarterly increase to $21.01 per square foot.

Central Fairfield was the only submarket with an average rent decrease ”“ the $33.11 per square foot price was a 2% quarter-over-quarter drop, although it was up 3% from the previous year.