Choyce Peterson Publishes Mid-Year 2023 Lower Fairfield County Office Market Survey: Availability Rate Decreases Since Year-End 2022
Choyce Peterson Publishes Mid-Year 2023 Lower Fairfield County Office Market Survey: Availability Rate Decreases Since Year-End 2022
NORWALK, CT, July 31, 2023 - Choyce Peterson, Inc. (www.choycepeterson.com), a full service commercial real estate brokerage firm with a specialization in tenant representation, announced the release of its 27th semi-annual Lower Fairfield County Office Market Survey. The survey depicts silhouettes of 96 buildings with a total inventory of 18.2 million square feet (sf) and tracks changes in offices pace availability from Year-End 2022 to Mid-Year 2023 in larger, primarily multi-tenanted Class A office buildings in Stamford, Norwalk, Greenwich, and Westport. The unique survey illustrates the absorption and give back of direct and sublease space, as well as overall availability statistics.
The survey shows there was a 1.7 percentage point decrease in total availability during the first half of 2023, from 31.0% at Year-End 2022 to 29.3% at Mid-Year 2023. Notably, the Mid-Year 2022 availability rate was 32.0%. Of the 5,354,222 sf of available space at Mid-Year2023: 3,700,018 sf (69.1%) is on a direct basis while 1,654,204 sf (30.9%) is sublease space.
The following refers to the survey’s “availability rate” at Year-End 2022 vs. Mid-Year 2023 in each market studied:
· Stamford saw the largest decrease in the area from 35.6% to 32.7%. Of the 31 buildings surveyed, 13 experienced a decrease in available square footage, 11 had an increase and 7 were unchanged. The vast majority of the increased available space was from three buildings: 300Atlantic Street, 695 E Main Street, and 120 Long Ridge Road. The largest absorption of space was at 201 Tresser Boulevard and One Station Place for a combined 235,425sf of leased space. Interestingly, the total amount of space on the sublease market remains relatively unchanged in the last six months.
· Norwalk decreased from 37.5% to 36.0%. Of the 20 buildings surveyed, 10 experienced a decrease in available square footage, 7 had an increase and 3 were unchanged. Four buildings combined showed a decrease in availability of nearly 140,000 sf: 601 Merritt 7, 535 Connecticut Avenue, 800 Connecticut Avenue and 20 Marshall Street. 401 and 501 Merritt 7 combined added over 85,000 sf of available space. While the amount of available direct space increased, the overall reduction in Norwalk’s availability was attributed to a significant decrease in sublease space offerings.
· Greenwich increased from 12.8% to 14.8% Of the 25 buildings surveyed, 5 experienced a decrease in available square footage, 4 had an increase and 16 were unchanged. The largest decrease in space was at 5 Greenwich Office Park with just over 12,000 sf leased. 1700 E Putnam Avenue, 55 Railroad Avenue and 777 W Putnam Avenue combined added 177,738 sf of available space, which makes up the majority of change in availability. It was surprising that Greenwich saw an increase in its office availability rate, however its total rate remains within an historically low range since 2018. Amazingly, 12of the 25 buildings have no space available, and only 5 have more than 30,000sf available.
· Westport decreased from 15.9% to 14.4%. Of the 20 buildings surveyed, 2 experienced a decrease in available square footage, 4 had an increase and 14 were unchanged. 55 Greens Farms Road and 500Post Road E combined added 15,524 sf to the availability. The Westport market remains tight with 10 of the 20 buildings surveyed having no space available, and only 2 have more than 25,000 sf available.
“It’s good news that three of the four submarkets we surveyed have a decreased availability rate over the last six months,” stated John P. Hannigan, co-founder and a principal at Choyce Peterson. “It’s a step in the right direction even as it continues to be a tenant’s market in the larger two cities surveyed, Stamford and Norwalk. In contrast, the smaller boutique towns of Greenwich and Westport remain a landlord’s market as 22 of the 45 buildings surveyed have no space available, and only eight of the 45 have over 25,000 sf available. We expect a moderate amount of leasing activity in the second half of 2023, primarily in the central business district of Stamford and along the Route 7 corridor in Norwalk. We certainly are seeing a flight to quality whereby tenants are downsizing, relocating to higher quality buildings, and paying a higher rate per square foot, yet reducing their annual rental obligation due to the decreased square footage leased.”
Charlene S. O’Connell, vice president at Choyce Peterson noted, “In the first half of 2023,we witnessed many companies maintaining a hybrid work schedule and therefore re-thinking their office footprint, often downsizing. We anticipate this trend continuing throughout the second half of the year. With nearly one-third of all available space coming from the sublease market, there remains many cost-effective opportunities for tenants. Our team has been successful in navigating the vast array of available space, ultimately giving our clients the confidence to select the optimal building and location for their business with advantageous financial and lease terms negotiated by our team.”
To view the market survey, please follow this link: https://www.choycepeterson.com/services/marketsurvey
Choyce Peterson, Inc.
Choyce Peterson, Inc.
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