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News release

STAMFORD, CT

Fairfield County Witnesses 10% Increase in Leasing Activity in 2014

While Greenwich CBD/Railroad, Stamford CBD/Railroad submarkets post greatest activity, suburban markets report substantial boost in deal volume


STAMFORD, CT, January 30, 2015 — JLL reported that leasing activity in Fairfield County increased by about 9.6 percent during the past year, due partly increased interest in Westport and Norwalk. Tenants completed approximately 3.32 million square feet in deals throughout the county in 2014 compared with 3.03 million square feet in 2013.

“Fairfield County building owners have slowly regained confidence in the market, as evidenced by the number of tenants actively touring the county’s space options,” said Robert Ageloff, Managing Director and head of JLL’s CT/Westchester office. “The shift from a tenant-favorable market to one where owners have more leverage appears imminent. Despite the positive outlook, in the current uncertain but stable economic climate, owners are still keeping tenant retention at the top of their to-do lists. We expect the number of renewals will increase in coming months."

Fairfield County recorded 301,048 square feet of positive absorption over the past year, substantially more than the 88,070 square feet of positive absorption in 2013. The three largest deals closed in the fourth quarter 2014 included Goldman Sachs Group Inc.’s 124,349 square feet at 1 American Lane in Greenwich, Charter Communications’ 73,564 square feet at 400 Atlantic Street in Stamford, and Tauck Tours Inc.’s 56,940 square feet at 10 Westport Road in Westport.

While the Greenwich CBD/Railroad and Stamford CBD/Railroad submarkets yielded the most leasing activity in the fourth quarter, the county’s suburban markets helped closed the gap. Westport and Norwalk alone reported nearly a 100,000–square-foot increase in tenant activity in 2014 compared with the previous year. The increased activity in Norwalk was mostly fueled by activity at Merritt 7, a thriving office park prized for its amenities and location. Norwalk and Westport each offer excellent access to mass transportation and top-quality, competitively priced buildings with high-end amenities.

Fairfield County’s overall vacancy rate fell to 21.8 percent in the fourth quarter of 2014, a decrease of 3.5 percent (or 0.8 percentage points) from 22.6 percent one year earlier. The county’s Class A vacancy rate declined 5.4 percent (or 1.2 percentage points) to 21.0 percent this quarter from 22.2 percent in the fourth quarter of 2013.

Overall average asking rents fell to $32.06 per square foot in the fourth quarter of 2014, a decrease of 4.2 percent from $33.47 per square foot one year earlier. Rates for the county’s Class A properties dropped to $35.74 per square foot this quarter, a decrease of 5.5 percent from $37.84 per square foot in the fourth quarter of 2013.

Stamford CBD/Railroad
Leasing activity within the Stamford CBD/Railroad submarket remained lackluster since midyear 2014. The submarket posted 31,798 square feet of negative absorption in the fourth quarter, but year-to-date absorption was positive at 153,729 square feet. Tenant requirements dropped to approximately 800,000 square feet in the fourth quarter of 2014 from more than 1 million square feet the previous quarter. Deal volume is expected to ramp up over the next few months due to pent up demand, given the dearth of tenant activity during the latter half of this past year.

The submarket’s overall vacancy rate fell slightly to 26.1 percent in the fourth quarter of 2014, decreasing less than 1.0 percent (or 0.1 percentage points) from 26.2 percent one year earlier. The Class A vacancy rate dropped to 26.3 percent this quarter, a decrease of less than 1.0 percent (or 0.2 percentage points) from 26.5 percent in the fourth quarter of 2013.

Overall average asking rents in the Stamford CBD/Railroad submarket fell to $43.21 per square foot in the fourth quarter of 2014, a decrease of 6.5 percent from $46.20 per square foot one year earlier. Rates for the submarket’s Class A product dropped to $43.86 per square this quarter, a decrease of 6.3 percent from $46.80 per square foot in the fourth quarter of 2013.

Greenwich CBD/Railroad
The Greenwich CBD/Railroad submarket has seen a consistent year-over-year price drop due to competition from buildings located just miles away in the Stamford CBD. This year, the re-pricing of some of the submarket’s buildings attracted a few tenants that otherwise would have preferred Stamford. Overall average asking rental rates in the Greenwich CBD/Railroad submarket fell to $82.37 per square foot in the fourth quarter of 2014, a decrease of 2.7 percent from $84.64 per square foot one year ago. Rates for the submarket’s Class A product dropped to $87.36 per square foot this quarter, a decrease of 1.1 percent from $88.31 per square foot in the fourth quarter of 2013.

The Greenwich CBD/Railroad area posted 12,822 square feet of negative absorption in the fourth quarter, with year-to-date absorption barely staying positive at 5,763 square feet. The overall vacancy rate in the Greenwich CBD/Railroad submarket fell to 19.0 percent in the fourth quarter of 2014, a decrease of 15.9 percent (or 3.6 percentage points) from 22.6 percent one year earlier. The submarket’s Class A vacancy rate dropped to 21.5 percent this quarter, a decrease of 17.6 percent (or 4.6 percentage points) from 26.1 percent in the fourth quarter of 2013.

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JLL is a leader in the New York tri-state commercial real estate market, with more than 1,600 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2013, the New York tri-state team completed approximately 25.9 million square feet in lease transactions, arranged capital markets transactions valued at $2.1 billion, managed projects valued at nearly $7.0 billion, and oversaw a property and facilities management portfolio of 95.3 million square feet and an agency leasing portfolio of 67.0 million square feet.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $53.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.