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NORTHEAST SNAPSHOT, OCTOBER 2006
Fairfield County, Connecticut Office Market
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L. Craig Lemle,
senior managing director,
Studley
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The office market in Fairfield County, Connecticut, is improving, but unfortunately not enough to promote new speculative development. As the market has tightened, the build-to-suits are the most likely possibility for new development in the area. For example, the Royal Bank of Scotland (RBS) in Stamford is one of the biggest and most noteworthy developments that has come online in the area this year.
RBS Greenwich Capital, a wholly owned subsidiary of the Royal Bank of Scotland, broke ground in late June on the new $400 million, 500,000-square-foot facility located in downtown Stamford. This new facility will accommodate the relocation of 550 employees from the bank’s New York office, 700 employees relocating from the Greenwich office and 600 new employees. In support of the project, the state department of economic community development is providing up to $100 million in urban reinvestment tax credits over a 10-year period. The Connecticut Development Authority has also approved a $9 million sales and use tax exemption on construction materials. The new development is projected to result in $204 million in net new state tax revenue over a 10-year period. In turn, the project will result in a positive impact on local tax revenues, resulting in $63 million over a 10-year period.
GE Real Estate, which is headquartered in Stamford, Connecticut, and Boehringer Ingelheim in Danbury are two major companies that have absorbed a majority of the space in Fairfield. Class A rental rates in Stamford for the top end of the market range from $32 to $55 per square foot. For the best value, Class A rents in Danbury range between $21 to $23 per square foot. We have seen a definite decrease in vacancy rates in all areas of Fairfield County, especially in Danbury and Norwalk.
In Fairfield County, there are two markets that will begin to see a fair amount of activity in the near future. The Norwalk market is a real sleeper. As the rents increase in Stamford and the overall market tightens, Norwalk is an excellent alternative for many companies. It also provides easy access to both Interstate 95 and the Merritt Parkway. Danbury is another submarket that people should pay attention to. This market area is away from the congestion of Interstate 95 and it is well-situated between Hartford and Albany, New York. Plus, Danbury provides an excellent work force that is close by.
— L. Craig Lemleis the senior managing director for Studley.
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