Fairfield County Office Market
The overall availability rate ended at 25.9%, improved from 27.6% recorded a year ago and from 26.3% at year-end 2023. Long-vacant, underutilized space slated for redevelopment that was removed from the market had a significant impact on overall availability. Leasing activity totaled 600,000 SF, on par with 2023 leasing volumes but 21% below the 10-year historical average of 760,000 SF. Net absorption was negative 41,283 SF, mainly due to space recently added to the market at 1600 Summer Street in Stamford. Small-to-midsize deals drove demand this quarter with 17 deals between 5,000 SF to 10,000 SF totaling 112,000 SF, nearly doubling totals seen a year ago. Deals ranging from 10,001 SF to 25,000 SF were up significantly from a first-quarter historical standpoint, with 18 of those completed for nearly 290,000 SF, up from 11 deals for an average volume of 177,000 SF. Conversely, there were no deals for more than 50,000 SF this quarter.
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Despite an increase in sublease availability, overall availability and vacancy rates decreased to 26.3% and 23.1%, respectively, at the close of the first quarter of 2024. This level remains skewed by a single, 1.1-million SF block of obsolete office space long vacated by IBM in Somers. Without this block the total vacancy rate would drop to 18.4%. Leasing activity ended at 300,000 SF, a decrease of 25.0% over the past year. Demand remains primarily lease-expiration driven and several of the larger renewals and or relocations involve shedding of excess space. Deals ranging from 5,000 SF to 10,000 SF drove demand this quarter, with 31 of those signed for a total of 215,000 SF, up 40.0% from the prior year. In total, 66 out of the 71 deals registered this quarter were for less than 10,000 SF. The county’s direct average asking rent showed a marginal 0.2% decrease from $28.80/SF in the first quarter of 2023 to the current $28.72/SF. Average asking rents had trended upwards since the pandemic, but the growth rate softened considerably since 2023.
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