Slight Fluctuations - Office space hardly moves in 1st quarter

April 29, 2008 – By Peter Healy, Staff Writer, The Advocate

The supply of rentable office space rose slightly in some lower Fairfield County cities and towns in the first quarter of this year.

About 17 percent of Stamford's 14.5 million square feet of office space was up for lease or sublease as of March 31, compared with 16.1 percent at the end of last year and 16.8 percent a year ago, according to averages from figures from five real estate firms. [Choyce Peterson coverage highlighted in yellow in the Read More section.]

A 1 percentage point rise means 145,000 square feet of office space became available for lease or sublease in Stamford. Available office space includes vacant or set to become empty during the next several months.

About 243,000 square feet is for lease at 181 and 208 Harbor Drive at the Harbor Plaza office complex in Stamford.

NatWest, a financial services company that now is part of the Royal Bank of Scotland, had leased the space until March, but had not occupied all of it, according to the Greenwich office of Newmark Knight Frank commercial real estate, which is looking for tenants for the Harbor Plaza vacancies.

"This is the first time a large amount of space has been available right on the water," said Hilarie Siles, executive managing director at Newmark's Greenwich office.

The 785,700-square-foot, seven-building Harbor Plaza is undergoing renovations.
In downtown Stamford, the UBS AG investment bank may return space to the market, real estate agents said. Switzerland-based UBS, Europe's biggest bank by assets, may announce job cuts at its investment banking unit next month.

"To date, the financial services group has not put up any large blocks for sublease," said Tom Pajolek, senior vice president at the Stamford office of Los Angeles-based CB Richard Ellis commercial real estate. "And we are cautiously optimistic they will continue to occupy the space they are currently in. Leasing has slowed to a moderate level, which obviously represents a cooled-down economy."

"The market is now focused on what will happen with the major financial institutions in Stamford, and how much space if any they might be putting on the sublet market," said John Goodkind, managing principal at the Greenwich office of Newmark Knight Frank. "With that being said, the Greenwich market remains surprisingly steady and we expect a number of large users to come out of the Greenwich market for Stamford product."

As of March 31, 7.9 percent of Greenwich's 4.8 million square feet of office space was up for lease or sublease, compared with 7.6 percent at the end of last year and 14.1 percent in the first quarter of 2007.

Among the major leases in town, Duff Capital Advisors is scheduled to move this fall from Field Point Road in Greenwich to 43,403 square feet of office space at 100 W. Putnam Ave.

A couple of financial services firms, however, have put up space for sublease. BearingPoint Capital seeks to sublet 18,000 square feet at 1700 E. Putnam Ave. in Old Greenwich, and AQR Capital Management has put 35,000 square feet of the 65,000 it leased at 33 Benedict Place in Greenwich on the sublease market, according to local real estate firms.

In Norwalk, 13.5 percent of the city's 5.7 million square feet of office space was available in the first quarter, compared with 13.4 percent at the end of last year and 16.5 percent a year ago.

"We have been pleasantly surprised there has not been a lot of subleasing in Norwalk," said Jim Fagan, senior managing director and head of Cushman & Wakefield Inc.'s Fairfield and Westchester County, N.Y., operations.

More space is slated to come on the market. Norwalk-based Seligson Properties plans to have 75,000 square feet of office space in its upcoming Waypointe development.

But the pending recession will lead to lower demand for office space, causing financial services companies to sublet more space, said John Hannigan, principal at Choyce Peterson commercial real estate in Stamford.

"Landlords are calling us for the first time in three or four years and informing us about available space in their buildings," he said.

The availability rate for Fairfield County's 44 million square feet of office space was 15.9 percent as of March 31, compared with 13.3 percent at the end of last year and 15.1 percent a year ago.

©2008 Southern Conn. Newspapers, Inc.