Choyce Tips: February 2010: Local Market Hovering Along the Bottom

(For access to full html version, please click here.) Unlike New York City, Choyce Peterson believes the Fairfield/Westchester office space market has hit bottom. For the past 18 months, this regional market has offered high vacancy rates and low rents; however, the tide is turning. Leasing activity and competition are increasing – especially in Greenwich.

The Greenwich market has become the first to tighten, and the effect could ripple out to adjacent regions. While tenants in the Fairfield/Westchester marketplace continue to enjoy significant advantages, generous offers of free rent, below-market rental rates and large tenant improvement allowances will gradually lessen as 2010 progresses. Tenants should keep a sharp eye on activity in their respective markets to determine whether they “go Greenwich!” 

For example, we have recently been representing three clients searching for office space in Greenwich. Each one delayed reaching a decision for a matter of weeks, and meanwhile, short-listed opportunities vanished or became bogged down by serious bidding competition. 

One of these firms received a proposal for space in August. After resuming negotiations in December, the landlord proposed a higher base rent, with less free rent and a lower tenant improvement allowance than their August offer. This kind of negotiating reversal in our region has been unprecedented for almost two years! 

Here at Choyce Peterson, we are suggesting our clients hasten the renewal or search process and avoid waiting until the last minute to seek new space. The ability to wait out unfavorable negotiations is rapidly diminishing, and today’s fantastic opportunities will only remain available for a limited time.