According to CBRE’s fourth quarter Westchester/Fairfield County office market reports, leasing activity in Fairfield County was the highest its been since 2015, ending the year with 2.6 million square feet of activity. Meanwhile in Westchester County, the market had its strongest quarter since Q2 2017, posting 324,000 square feet of leasing activity. However, annual leasing in the county continued to diminish, with 907,000 square feet of activity at year-end.
Fairfield County
During the fourth quarter of 2018, Fairfield County saw nearly 581,000 square feet of leasing activity, bringing the annual total to 2.6 million square feet – 27.8% higher than the 2017 total. Asking rents climbed gradually in most areas of Fairfield County, with a county-wide average of $32.15 at year-end, up nearly 2% from last year. While the availability rate, at 23.9%, remained essentially flat both quarter-over-quarter and year-over-year, fluctuations continued to affect the submarkets. The availability rate in Greenwich CBD managed to drop another 90 basis points (bps) to a remarkably low 8.3%, while both Stamford submarkets saw availability drops as well, though levels still remain high.
“While relatively stable, there are still various factors that are causing some shifts in the Fairfield County office market that we will see more of in 2019,” said Tom Pajolek of CBRE. “Tenant requirements are continuing to evolve – the way that corporate users think about office space is changing. Recently, tenants have expressed more of a desire to have Class A, transit-oriented space located in a thriving downtown area. This is a trend that we expect to see more of in 2019.”
Westchester County
Westchester County posted its strongest quarter of leasing activity since Q2 2017, with 324,000 square feet of activity, a 52% increase quarter-over-quarter. However, 2018’s annual leasing amounted to 907,000 square feet, its lowest total in 10 years and the fourth straight year of diminishing activity.
“For years, we have talked about the trend of adaptive repurposing and major capital improvement projects at older office product. As a result, we’ve seen a drop in availability and a bump in asking rents, mainly in the CBD. Now that this trend has settled, the full effects are being felt,” said William V. Cuddy Jr. of CBRE. “For example, smaller tenants, like law firms, are now migrating to locations out of the CBD, where rents are lower. Westchester County is very much a market in transition.”
About 37% of the market has traded in sale over the last five years, resulting in millions of square feet being repurposed and removed from inventory. Coupled with the withdrawal of the former IBM campus in Somers, there was a significant 460 bps decline in the availability rate year-over-year, to 18.4%. Westchester’s rents remained largely stable quarter-over-quarter and registered an increase of 2.9% year-over-year, to $29.58, the third consecutive year with rent growth over 2%. The CBD, however, is the submarket to match – at $35.41, year-over-year growth was 2.7%, while the last five years have seen rent growth of 16.7%.
You can access the full Fairfield County MarketView here and the Westchester County MarketView here.
Fairfield County
During the fourth quarter of 2018, Fairfield County saw nearly 581,000 square feet of leasing activity, bringing the annual total to 2.6 million square feet – 27.8% higher than the 2017 total. Asking rents climbed gradually in most areas of Fairfield County, with a county-wide average of $32.15 at year-end, up nearly 2% from last year. While the availability rate, at 23.9%, remained essentially flat both quarter-over-quarter and year-over-year, fluctuations continued to affect the submarkets. The availability rate in Greenwich CBD managed to drop another 90 basis points (bps) to a remarkably low 8.3%, while both Stamford submarkets saw availability drops as well, though levels still remain high.
“While relatively stable, there are still various factors that are causing some shifts in the Fairfield County office market that we will see more of in 2019,” said Tom Pajolek of CBRE. “Tenant requirements are continuing to evolve – the way that corporate users think about office space is changing. Recently, tenants have expressed more of a desire to have Class A, transit-oriented space located in a thriving downtown area. This is a trend that we expect to see more of in 2019.”
Westchester County
Westchester County posted its strongest quarter of leasing activity since Q2 2017, with 324,000 square feet of activity, a 52% increase quarter-over-quarter. However, 2018’s annual leasing amounted to 907,000 square feet, its lowest total in 10 years and the fourth straight year of diminishing activity.
“For years, we have talked about the trend of adaptive repurposing and major capital improvement projects at older office product. As a result, we’ve seen a drop in availability and a bump in asking rents, mainly in the CBD. Now that this trend has settled, the full effects are being felt,” said William V. Cuddy Jr. of CBRE. “For example, smaller tenants, like law firms, are now migrating to locations out of the CBD, where rents are lower. Westchester County is very much a market in transition.”
About 37% of the market has traded in sale over the last five years, resulting in millions of square feet being repurposed and removed from inventory. Coupled with the withdrawal of the former IBM campus in Somers, there was a significant 460 bps decline in the availability rate year-over-year, to 18.4%. Westchester’s rents remained largely stable quarter-over-quarter and registered an increase of 2.9% year-over-year, to $29.58, the third consecutive year with rent growth over 2%. The CBD, however, is the submarket to match – at $35.41, year-over-year growth was 2.7%, while the last five years have seen rent growth of 16.7%.
You can access the full Fairfield County MarketView here and the Westchester County MarketView here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
