Business & Tech

Commercial Vacancies Rise in Fairfield County

Countywide commercial real estate market forecast remains dim, but New Canaan/Darien market brightens.

While the commercial real estate market continued to soften elsewhere in Fairfield County in the third quarter, vacancy rates actually declined locally, according to a new report by Cushman & Wakefield.

The vacancy rate in the New Canaan/Darien submarket dropped to 11.9 percent from 14.3 percent last quarter. Meanwhile the vacancy rate in the Wilton/Westport submarket rose to 15.9 percent from 12.6 percent; in Greenwich the rate was up nearly a point to 18.5 percent; and in the Stamford Central Business District vacancies jumped almost five points to 23.4 percent (due largely to Gen Re and remaining subtenants moving out of 509,000 square feet at 695 East Main Street).

Countywide the vacancy rates were up six full points in the third quarter to 19.9 percent from 13.9 percent a year ago.

Published rents slipped across Fairfield County in the third quarter, despite a steady increase every quarter over the last decade. Asking rents for Class-A space averaged $35.68 per square foot, down significantly from the $36.72 average last quarter and $36.23 at the same time last year.

Landlords are making further concessions to tenants, cutting rents by as much as 15 to 30 percent, and in some case offering free rents or higher work allowances.

"We’re also expecting another year or so of soft-market conditions," said analyst Jim Fagan of Cushman & Wakefield of CT Inc. "Unemployment will continue to rise and occupancy will continue to drop. We are confident, however, that employment and market fundamentals will again improve. It’s the cyclical nature of real estate. It will happen; you just can’t rush it.”


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