Fairfield County Office Market
After trending downward for six consecutive quarters, the overall availability rate moved back to 27.9%, up from 26.3% at the start of 2024. The direct vacancy rate hit a new record high of 19.3%, attributed to expiring leases and downsizing. 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 quarter, adding new supply to the market. More than 900,000 SF of leases were transacted in the third quarter, bringing the YTD 2024 leasing volumes to nearly 2.5 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 650,471 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 slightly to $40.85/SF compared to $41.06/SF in the first quarter of the year, while Class B rents remained stable at $29.31/SF.
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