NORTHEAST SNAPSHOT, OCTOBER 2004

Fairfield/New Haven Industrial Market

“Slow expansion seems to be the name of the game for Fairfield and New Haven counties’ (Connecticut) industrial market, primarily because of a relatively limited supply of appropriate product and the cost of doing business and living in the area,” notes Sean Cahill, first vice president at CB Richard Ellis’ Stamford, Connecticut, office.

“The region’s market has been hit hard by the recent economic downturn, leading to caution in both the expansion of existing businesses and the initiation of new ventures,” he adds.

Vacancy rates are currently around 12 percent of existing inventory and rental rates are low, ranging from $4.50 per square foot, triple-net, for warehouse space to $12.50 per square foot, triple-net, for high-tech space.

“We’re seeing little in the way of new industrial development in Fairfield and New Haven counties,” Cahill adds.

“The little development currently underway is in the city of Shelton, mostly because of its affordable industrially zoned land. The town’s access to an affordable and appropriate labor market is also a major plus for manufacturers looking to build a business in that location.” A 113,000-square-foot build-out has recently been completed in the Shelton Technology Center, with Random House moving into 42,000 square feet in the industrial park. Also in the town of Shelton, Bridgeport Atrium & Glass has leased 85,000 square feet at 710 Bridgeport Ave.

More development is underway in the Shelton Technology Center, where there is 190,000 square feet of industrial/ flex space currently under construction. While this development activity somewhat increases the supply of industrial space, it fails to make a significant impact on the need for non-office commercial space.

In addition to the activity in Shelton, high-tech, light industrial users, and companies involved in distribution up and down Interstate 95 are showing interest in the Route 8 corridor.

According to Cahill, “Eastern Fairfield County — Shelton, Stratford, Bridgeport — looks to be the hottest market in the near future, for the same reasons many businesses have already chosen to locate there: proximity to affordable labor and the ability to construct new quality product in a strategically advantageous area.”

Local developers handle most industrial development; Fairfield and New Haven counties have not seen much interest from developers based in other markets. Local companies such as Robert D. Scinto and Cuminotto Inc. are the primary drivers of activity in the area.

“Fairfield and New Haven’s industrial real estate market will remain a secondary player in the near future as long as the dearth of affordably priced, industrially zoned land continues to curb development,” Cahill adds. “Without new supply, companies will continue to favor more developed markets like New Jersey and the outer boroughs of New York City.”

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