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News release

Stamford, CT

Jones Lang LaSalle Reports Rising Vacancy Rates Throughout Fairfield County Office Market

Less-Volatile Westchester County Office Market Maintains Top Position


STAMFORD, CT, February 10, 2009 — Jones Lang LaSalle announced the Fairfield County, Conn., Class A office market recorded significant increases in vacancy rates in nearly Every submarket in the final quarter of the year. The westchester County, N.Y., office market held its own at year-end 2008, with little movement in either direction.
 
Fairfield County posted an increase in its overall Class A vacancy rate this quarter, rising to 15 percent at year-end 2008 from 13.3 percent in the third quarter of 2008. The county’s Class B product also saw overall vacancy rates, rising to 22.8 percent from 22.2 percent during the same time period.
 
“As companies continue to downsize in response to turbulent economic conditions, we are seeing a significant amount of sublease space enter the Fairfield County office market,” said Jeffrey Gage, executive managing director of brokerage with the company’s Stamford office. “Some of this space presents a challenge for brokers as the time remaining on the lease term may be too short for many space users. With the addition of this competitively priced product to the market, landlords are competing aggressively for a short list of tenants still in out in the market for space.”
 
Central Fairfield County was the only area where overall office vacancy rates fell this quarter, assisted by a decrease in the Class B vacancy rate that was fueled by Velocity sports & Entertainment signing a direct lease for 32,652 square feet at 230 East Avenue in Norwalk. As a result, Central Fairfield County's Class B vacancy rate fell to 35 percent at year-end 2008 from 35.9 percent in the third quarter of 2008. The submarket’s Class A buildings posted an increase in vacancy rates, rising to 11.5 percent from 11.3 percent during the same time period.
 
Overall average asking rents for Fairfield County office space decreased slightly in the final quarter of the year, with a minor drop in Class A rents offset by a small boost in Class B rates. The county’s Class A office buildings saw rents fall to $38.96 per square foot at year-end 2008 from $39.24 per square foot in the third quarter of 2008. Rates for Class B product in Fairfield County rose to $29.34 per square foot from $29.17 per square foot.
 
Stamford’s Class A office vacancy rate rose in the final quarter of the year. The city’s high-quality office buildings saw vacancy rates expand to 18.4 percent in the fourth quarter of 2008 from 16.5 percent the previous quarter. Stamford’s Class B product recorded a boost in vacancy rates, jumping to 24.7 percent from 22.8 percent during the same time period.
 
Office rents in Stamford decreased in all building classes at year-end 2008. Rates for Class A office space dropped to $43.43 per square foot in the fourth quarter of 2008 from $44.15 per square foot in the third quarter of 2008. The city’s Class B product saw rents slip to $26.88 per square foot from $27.18 per square foot.
 
Greenwich, with its heavy concentration of hedge funds and other financial services firms, posted large increases in vacancy rates in all office building classes and, consequently, the biggest decrease in average asking rental rates in all office building classes.
 
The overall office vacancy rate in Greenwich climbed considerably at year-end 2008, fueled by rising amounts of available Class A and Class B product. The city’s Class B office buildings saw vacancy rates rise this quarter, climbing to 18.2 percent in the fourth quarter of 2008 from 14.2 percent in the third quarter of 2008. Class A office buildings did not perform much better, jumping to 11.8 percent from 9.4 percent during the same time period.
 
Greenwich’s Class A buildings posted a drop in rents this quarter, falling to $75.68 per square foot at year-end 2008 from $78.24 per square foot in the third quarter of 2008. Class B office buildings saw rents move by only a few cents, rising to $61.63 per square foot from $61.61 per square foot.
 
Westchester County posted an overall decrease in office vacancy rates at year-end 2008, driven by falling or unchanged Class A vacancy rates throughout the county. Class A office buildings recorded a vacancy rate decrease this quarter, falling to 18.8 percent in the fourth quarter of 2008 from 20.2 percent in the third quarter of 2008. Class B product throughout the county saw vacancy rates increase, rising to 13.9 percent from 12.8 percent.
 
Westchester County is not a volatile office market and rarely sees major fluctuations in vacancy or pricing for a couple of reasons. “The county’s close proximity to Manhattan ensures a steady trickle of activity from space users,” said Edward Tonnessen, executive managing director of brokerage with the company’s Stamford office. “The average tenant size is smaller so any one gain or loss does not impact the vacancy rate very much.”
 
Westchester County building owners eked out an increase in overall average asking rents of just a few cents this quarter. The area’s top-end buildings saw rates increase to $28.21 per square foot at year-end 2008 from $28.16 per square foot in the third quarter of 2008. Class B property posted a slight dip in rents, falling to $23.34 per square foot from $23.45 per square foot during the same time period.
 
White Plains maintained its position as Westchester County’s primary office market, with overall vacancy rates remaining stable and rents declining slightly. The city’s Class A vacancy rate barely moved this quarter, rising to 21.3 percent at year-end 2008 from 21.2 percent in the third quarter of 2008. Class B buildings posted a slight decrease in vacancy rates, falling to 11.9 percent from 12.1 percent.
 
Class A office rents in Westchester County fell slightly in the final quarter of the year, dropping to $30.43 per square foot in the fourth quarter of 2008 from $30.83 per square foot the
previous quarter. Class B rates rose a small amount, increasing to $25.54 per square foot from $25.38 per square foot during the same time period.
 
About Jones Lang LaSalle
 
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.3 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $46 billion of assets under management. For further information, please visit our Web site, www.joneslanglasalle.com.
 
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