While class B vacancy remained relatively flat, class A vacancy increased by 1.0 pp to 21.5%. The Stamford submarket rec
MARKETBEAT OFFICE SNAPSHOT
FAIRFIELD COUNTY, CT
Q4 2014
A Cushman & Wakefield Research Publication
Cushman & Wakefield, Inc. 107 Elm Street, 8th Floor Stamford, CT 06902-3851 www.cushmanwakefield.com/knowledge
For more information, contact: Jason Price, Research Director 201 508 5208
[email protected]
Y-O-Y CHANGE
20.8%
21.2%
0.4pp
$37.74
$36.62
-3.0%
2,017,534
2,556,964
26.7%
Overall Vacancy Direct Asking Rents (psf/yr) YTD Leasing Activity (sf)
12 MONTH FORECAST
DIRECT RENTAL VS. VACANCY RATES $40.00
20.0%
$38.00
19.0%
$36.00
18.0%
$34.00
17.0%
$32.00
16.0% 15.0%
$30.00 2010
2011
2012
2013
DIRECT GROSS RENTAL RATE
2014
DIRECT VACANCY RATE
2010
2011
LEASING ACTIVITY
2012
2.6
2013
-0.3
2 -0.3
4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0
2.1
LEASING ACTIVITY VS. OVERALL ABSORPTION
-.002
The county’s average direct rental rate fell 1.2% from $36.95 per square foot (psf) in Q3 to the current $36.62 psf, and experienced a 3.0% drop since a year ago. The decrease in rents can be attributed
Q4 2014
-0.4
Despite the quarterly increase in leasing activity, Fairfield County saw its overall vacancy rate rise from 20.5% in Q3 to 21.2% during Q4. While class B vacancy remained relatively flat, class A vacancy increased by 1.0 pp to 21.5%. The Stamford submarket recorded 194,225 sf of negative overall absorption during Q4 as 426,000 sf came online at the former Pitney Bowes Headquarters. This availability pushed vacancy 3.6 pp in the Stamford Non-CBD market. Stamford CBD registered 149,099 sf of positive overall absorption, which led to the vacancy falling from 27.4% to 24.2% during Q4. With most of the submarkets recording negative absorption during Q4, Fairfield County, as a whole, experienced more than 430,000 sf of negative overall absorption.
Q4 2013
2.4
FORMER PITNEY BOWES HQ CAUSES VACANCY SPIKE
STATS ON THE GO
2.9
More than 575,000 square feet (sf) of deals were inked during Q4, a 37.9% increase from last quarter. With more than 2.5 million sf leased in 2014, Fairfield County has now recorded more than 2.0 million sf leased annually since 2009. Similar to the previous quarter, the Stamford submarket drove leasing during Q4 with 278,468 sf of leases signed. The Stamford submarket accounted for 53.5% of Q4 countywide activity and displayed a 53.7% in leasing climb from a year ago. Meanwhile, the South Central submarket also experienced a robust quarter of activity with 125,990 sf of completed deals. The majority of that space can be attributed to the 56,940-sf leased by Tauck Tours Inc. at 10 Wesport Road in Wilton. As usual, the majority of the deal volume in the county were concentrated within class A assets. The finance, business services, and communication sectors propelled leasing during the quarter.
Fairfield County’s economy is anticipated to grow nominally during 2015. Both quarterly and annual leasing activity improved, showing that Fairfield County has a healthy leasing environment that should continue throughout the new year. As a result, vacancy is forecasted to improve in 2015, though there is uncertainty regarding some financial tenants staying in Stamford. If they exit the market, we could see vacancy levels, in turn, rise again.
-2
COUNTY DEMAND MAINTAINS GROWTH IN Q4
OUTLOOK
psf/yr
With 2014 being America’s best year of job growth since 1999, Fairfield County now has a 5.6% unemployment rate which is a 1.2 percentage point (pp) improvement from the start of the year. Although the state lags behind the national average in job recovery and average weekly wage gains, a strong year of leasing proved Fairfield County is experiencing healthy, albeit delayed economic growth.
to quality spaces leasing up consistently throughout the year in the high priced Greenwich Submarket.
msf
ECONOMIC OVERVIEW
2014
OVERALL ABSORPTION
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. © 2015 Cushman & Wakefield, Inc. All rights reserved.
1
FAIRFIELD COUNTY, CT SUBMARKET
INVENTORY
OVERALL VACANCY RATE
YTD LEASING ACTIVITY
UNDER CONSTRUCTION
YTD CONSTRUCTION COMPLETIONS
YTD DIRECT NET ABSORPTION
YTD OVERALL NET ABSORPTION
23.3%
DIRECT VACANCY RATE 19.4%
DIRECT WTD. AVG. CLASS A GROSS RENTAL RATE*
106,660
OVERALL WTD. AVG ALL CLASSES GROSS RENTAL RATE* $55.31
CBD
8,706,196
609,479
0
0
123,372
Greenwich CBD
1,884,014
20.4%
16.5%
99,459
0
0
7,296
(7,794)
$86.48
$89.31
Stamford CBD
6,822,182
24.2%
20.2%
510,020
0
0
116,076
114,454
$47.61
$48.28
GREENWICH SUBURBAN STAMFORD SUBURBAN SOUTH CENTRAL
2,300,086
20.7%
22.0%
78,226
0
0
(37,117)
(32,112)
$48.42
$48.42
9,201,361
23.6%
22.9%
780,952
0
0
(59,952)
(60,417)
$35.43
$38.66
8,570,897
21.1%
19.6%
503,060
0
0
(340,540)
(309,858)
$28.92
$31.60
696,403
13.6%
7.6%
21,137
0
0
(3,600)
(35,584)
$30.96
$30.58
Norwalk
6,206,708
23.9%
23.1%
404,543
0
0
(202,615)
(185,033)
$29.22
$31.86
Wilton
1,667,786
13.9%
11.2%
77,380
0
0
(134,325)
(89,241)
$26.61
$30.11
CENTRAL
2,090,128
15.5%
15.0%
91,895
0
0
(15,853)
(10,203)
$35.96
$38.16
Westport
1,325,866
22.2%
22.1%
49,783
0
0
(28,071)
(14,227)
$36.48
$38.34
764,262
3.9%
2.9%
42,112
0
0
12,218
4,024
$30.79
$33.95
EASTERN
6,925,850
16.6%
15.2%
395,551
0
0
42,418
34,222
$20.47
$20.95
Bridgeport
1,641,111
11.7%
10.4%
41,451
0
0
30,694
30,694
$24.63
$25.56
Shelton/Stratford
3,991,184
17.0%
15.1%
324,143
0
0
26,175
17,979
$19.71
$20.99
Trumbull
1,293,555
21.6%
21.6%
29,957
0
0
(14,451)
(14,451)
$18.72
$18.11
GREATER DANBURY TOTALS
3,287,268
20.9%
20.8%
97,801
0
0
(4,999)
15,101
$23.58
$24.56
41,081,786
21.2%
19.5%
2,556,964
0
0
(292,671)
(256,607)
$36.93
$39.39
Darien/New Canaan
Fairfield/Southport
$55.38
* RENTAL RATES REFLECT ASKING $PSF/YEAR
MARKET HIGHLIGHTS SIGNIFICANT Q4 2014 LEASE TRANSACTIONS
SUBMARKET
TENANT
BUILDING CLASS
One Far Mill Crossing, Shelton
Eastern
Sikorsky Aircraft Corporation
A
92,109
400 Atlantic St, Stamford
Stamford CBD
Charter Communications
A
73,564
10 Westport Road, Wilton
South Central
Tauck Tours, Inc.
A
56,940
6 High Ridge Park, Stamford
Stamford Non-CBD
Parfum de Coeur
A
22,408
3001-3003 Summer Street, Stamford
Stamford Non-CBD
First County Bank
A
22,147
SIGNIFICANT Q4 2014 SALE TRANSACTIONS
SUBMARKET
BUYER
PURCHASE PRICE / $PSF
8-10 Wright Street
Central
Marcus Partners
$16,500.000 / $196.42
84,000
276 Post Road West
Central
Gerard Alexander Property Holdings, LLC
$13,066,666 / $408.33
32,000
SIGNIFICANT Q4 2014 CONSTRUCTION COMPLETIONS N/A
SUBMARKET
MAJOR TENANT
COMPLETION DATE
BUILDING SQUARE FEET (% LEASED)
SIGNIFICANT PROJECTS UNDER CONSTRUCTION N/A
SUBMARKET
MAJOR TENANT
COMPLETION DATE
BUILDING SQUARE FEET (% LEASED)
SQUARE FEET
SQUARE FEET
* RENEWAL – NOT INCLUDED IN LEASING ACTIVITY STATISTICS
Cushman & Wakefield, Inc. 107 Elm Street, 8th Floor Stamford, CT 06902-3851 www.cushmanwakefield.com/knowledge
For more information, contact: Jason Price, Research Director 201 508 5208
[email protected]
The market terms and definitions in this report are based on NAIOP standards. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. © 2015 Cushman & Wakefield, Inc. All rights reserved.
2
