Wilton office lease is one of biggest of the last three months
Although the number of jobs in Fairfield County grew during the third quarter of 2019, the demand for office space declined, according to a report from the real estate services firm Cushman & Wakefield.
This is contrary to the usual trend of employment growth spurring office demand.
According to the firm, Fairfield County added 2,565 jobs from the previous three months. There were 3,974 more people employed in Fairfield County at the end of the quarter than there were at this time last year.
As a result, the unemployment rate dropped to 3.3 percent—the lowest level recorded in more than 17 years. In Wilton, the unemployment rate in August was 2.8 percent.
Despite this, year-to-date office leasing activity fell 17.5 percent from this time last year to 1.7 million square feet. Most of that decline was due to a reduction in large block transactions, the report said, pointing out that one transaction in the third quarter of 2018 accounted for 25.8 percent of 2018 year-to-date demand.
Wilton accounted for one of the largest office leasing transactions in Fairfield County for the third quarter of 2019:
415,266-square-foot new lease at 677 Washington Boulevard in Stamford.
98,907-square-foot new lease at 50 Danbury Road in Wilton.
58,566-square-foot expansion at 333 Ludlow Street in Stamford.
As it stands, the office vacancy rate in Fairfield County is 26.7 percent. However, that is expected to drop to 23.5 percent as tenants begin to occupy the space they committed to over the past year, the report said.
The overall average asking rent dropped by $0.74 per square foot over the last 12 months to $31.47. Most of the decline occurred in the Stamford and Greater Danbury markets, down $0.21 and $5.71 per square foot, respectively.
Most of the Greater Danbury rental market decline was attributed to the complete renovation, repositioning and repricing of the Summit at the Ridge commercial complex at 39 Old Ridgebury Road, which added more than 740,000 square feet of class A office space to the market, priced at $18.50 per square foot.
Jim Fagan, managing principal of Cushman & Wakefield, predicted “Submarkets with highly amenitized buildings located near major transportation outlets will continue to drive demand going forward.”
In neighboring Westchester County, despite a loss of more than 4,000 jobs over the past year, year-to-date leasing activity actually increased 20.4 percent, recording 785,291 square feet of new transactions.
The West I-287 submarket led the county in leasing activity so far this year, outpacing year-to-date demand recorded last year by 33.2 percent with 239,070 square feet transacted.
Overall vacancy throughout the county fell over the last 12 months to 23 percent.
Overall average asking rents increased $1.05 per square foot over the last 12 months to $28.50 per square foot.