Fairfield County’s office market kicked off 2019 with a bang, generating 725,000 square feet in leasing activity, according to data released by CBRE. The first-quarter leasing activity was 9.2 percent over the five-year quarterly average, and CBRE noted this was the strongest beginning to a year since 2015.
However, the robust statistics were not driven by a countywide effort, but were instead dominated by a pair of major deals: WWE signing a 16½-year lease for the 415,000-square-foot, three-building complex at 677 Washington Blvd. in Stamford that was once the home to UBS; and Diageo’s relocation from its Norwalk headquarters to a 38,000-square-foot space at 695 East Main St. in Stamford.
Tom Pajolek, executive vice president at CBRE’s Stamford office, observed that the first quarter is continuing “a trend from last year, with two or three very big deals dominating the headlines.” Pajolek recalled last year’s mega-transactions — Charter Communications’ third-quarter deal that covered 532,258 square feet at 406 Washington Blvd. in Stamford, FactSet’s 173,164-square-foot lease at 45 Glover Ave. in Norwalk during the first quarter and Reed Exhibition Cos.’ 93,899-square-foot transaction at 201 Merritt 7 in Norwalk in the third quarter — as “the big deals that drove the market.”
The first quarter seemed a bit sleepy outside of the WWE and Diageo leases, with Guidepost magazine’s 21,121-square-foot renewal at 39 Old Ridgebury Road in Danbury coming in as the third-largest transaction of the period, followed by Charter’s 18,391-square-foot sublease at 400 Atlantic St. in Stamford as the fourth-largest and Ventus Networks’ 17,266-square-foot renewal at 10 Norden Place in Norwalk as the fifth-largest.
Adding to the lopsided state of the office market was the dominance of the Greenwich and Stamford CBD zones, which accounted for 73.7 percent of the first quarter’s leasing activity despite hosting only 30.3 percent of the county’s office market inventory. CBRE determined that Fairfield County posted nearly 912,000 square feet in negative net absorption in the first quarter, which was primarily attributed to the removal or repurposing of older building stock.
“The suburban stock is rightsizing, for lack of a better word,” observed Pajolek, noting the recent announcements of the conversion of the old United Healthcare building in Trumbull into a senior living complex and the former Union Carbide headquarters in Danbury into a mixed-use development. Within the last three years, roughly 4.3 percent of the county’s office market has been converted into other property usage.
As for the non-CBD zone office markets in Fairfield County, Pajolek acknowledged that things are “very quiet,” with properties in those localities appearing to be in the wrong place at the wrong time, at least in terms of leasing trends.
“Companies want to urbanize and be within transit-oriented development with access to labor from New York,” he said, adding that Stamford’s aggressive focus on developing apartment complexes has helped to complement the city’s increased leadership position in the office market.