CT Post
Property Rounds: Stamford may benefit from a full Merritt 7
By: Alexander Soule
With a tight corridor in Norwalk the hottest pocket of commercial real estate in Fairfield County, a few blocks in downtown Stamford could soon inherit that mantle as the UBS building comes into play.
In March, the Wall Street Journal reported UBS plans to move its offices from its longtime home at 677 Washington Boulevard into the building RBS built in 2010 across the street at 600 Washington Boulevard.
The UBS building has been listed as available since last fall by the Stamford office of Cushman& Wakefield, which has yet to report any leasing activity in the building while UBS finalizes plans for its Stamford workforce.
Occupying a prized locale across the street from the train station, brokers and economic development veterans say the UBS building would leap to the top of the list among Fairfield County's busiest corners for lease activity. Holding that status today is Norwalk's Merritt 7 Corporate Park, which is prying Frontier Communications (Nasdaq: FTR) out of High Ridge Park in Stamford on the heels of a Merritt 7 expansion by the data backup and recovery company Datto.
"The location is perfect," said Michael Gordon, executive managing director in the Stamford office of Colliers International, referencing the UBS building. "Yes, I would think that would be strong, strong competition."
On par with Greenwich
Few have a better perspective on what addresses businesses prize most than John Hannigan and Alan Peterson, not just from their day-to-day work as principals of the tenant advisory firm Choyce Peterson, but also from the perspective of having considered the question themselves last year in relocating from West Main Street in Stamford to Norwalk.
Peterson and Hannigan chose MerrittView at 383 Main Street in Norwalk, which is owned by Empire State Realty Trust (NYSE: ESRT) and is on the opposite side of the Merritt Parkway from Merritt 7 Corporate Park.
"We wanted a class A building with amenities and great highway access, which this (has)," Hannigan said. "It brings us a little bit more into mid-county, so we can get to Greenwich in 20 minutes and we can get up to Shelton and Trumbull in 20 minutes."
Incredibly, from an occupancy perspective, the tight corridor of offices in central Norwalk extending from 101 Merritt 7 down to Merritt View boast an occupancy rate on par with Greenwich's central business district, with a vacancy rate of under 10 percent thanks to major tenants including GE Capital, Xerox, Diageo, FactSet Research, Datto and soon, Frontier.
Touring activity
With Merritt7 listing only one available space with more than 20,000 square feet, however, property owners in downtown Stamford would appear to be at the pole position for new leases, particularly those within steps of the Metro-North station.
There is no better billboard for the appeal of that locale than the Metro Center sign that hangs from Empire State Realty's 1 Station Place, opposite the tracks from the UBS building and leased up on 97 percent of the building's space. Toward the close of 2014, Empire State Realty refinanced a mortgage secured by Metro Center, with the new, $100 million loan having a 10-year term at a fixed interest rate of 3.59 percent.
If Metro Center has maintained high occupancy rates, so has Greenwich's central business district, which saw two significant deals in the first quarter with Affiliated Managers Group's plans to move a West Norwalk office to 600 Steamboat Road in Greenwich, and Security Benefit Corp. securing about half that amount of space at the same address. Jones Lang LaSalle said it was the strongest leasing activity for Greenwich's central business district in nearly two years, and that current "touring activity" remains strong.
Until 2010 the home of RBS Greenwich Capital and before that General Reinsurance before its own move to Stamford, 600 Steamboat has perhaps the most picturesque setting of any office building in Fairfield County, running along a length of Greenwich Harbor adjacent to the Italianate Delamar Hotel. In 2013, the private equity fund General Atlantic chose 600 Steamboat for its local office.
"It's a spectacularly situated building, all things considered if you compare it to other locations in Greenwich," said Brian Higgins, a broker in the New York City office of Jones Lang LaSalle who represents 600 Steamboat Road for owner Gen Re. "We are seeing dramatic interest."
It is anyone's guess how dramatic the activity could be for the UBS building in Stamford, but it is safe to say it is the talk of the town. On Tuesday, Stamford's economic development director Thomas Madden said he could provide no insight on any movement by UBS and potential positioning of the building, whether for one or more tenants.
Choyce Peterson, Inc.
Choyce Peterson, Inc.
Choyce Peterson, Inc.
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