Fairfield County Office Market
After reaching a historical high of 27.9% last quarter, the overall availability rate ended at 27.7% in the fourth quarter, up from 26.3% at the start of 2024. The direct vacancy rate hit a new record high of 19.3% last quarter and stayed at 19.3% in the fourth quarter. Although several buildings slated for redevelopment have been removed from the office inventory, large occupiers such as Indeed, Henkel and Philips have reduced footprints this year, adding new supply to the market. More than 889,000 SF of leases were transacted in the fourth quarter, bringing the YTD 2024 leasing volumes to nearly 3.4 million square feet. But while large deals buoyed total leasing volumes, they were a double edge sword, as some reduced their original footprints by half. Year-to-date net absorption therefore ended with negative 591,646 SF. With more leasing activity focused on higher-priced product and leaving behind availabilities with a lower price tag, the Class A direct average asking rate moved down to $39.50/SF compared to $40.93/SF in the fourth quarter of 2024, while Class B rents remained stable at $29.39/SF.
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