Fairfield County CBD Experiences One of Its Strongest Years to Date; Westchester County Posts First Year-Over-Year Leasing Activity Increase
01 Jan 2020
According to CBRE’s Q4 2019 Fairfield/Westchester County office market reports, The Stamford CBD experienced one of its best years on record, although leasing activity in Fairfield County ultimately decelerated. Meanwhile, Westchester County finished out 2019 with its strongest quarter of the year, posting 312,000 sq. ft. of leasing activity.
Despite having the strongest first quarter since 2015, Fairfield County closed out the year with just over 2 million sq. ft. in leasing activity, falling 20% below the five-year quarterly average. However, The Stamford CBD had a strong performance, accounting for 50% of total leasing volume for the year. The submarket produced 1.1 million sq. ft. of leasing activity, achieving its second-best year in the past 10 years, which can be attributed to the WWE transaction at the former UBS center at 677 Washington Boulevard during the first quarter.
“In Fairfield County, we saw transit-oriented developments attracting a majority of leasing activity in 2019, with WWE’s 415,000 sq. ft. lease in the first quarter serving as testament to the market demand for these types of urban properties and locations,” said Tom Pajolek, an Executive Vice President at CBRE. “While leasing momentum was sluggish in Q4, the county demonstrated solid tenant retention, with the top three transactions of the quarter being lease renewals.”
The availability rate in Fairfield County overall dropped 30 basis points (bps) year-over-year to 23.6%, remaining relatively flat quarter-over-quarter. The county posted 409,000 sq. ft. of positive absorption as a result of a high-end space being taken off the market. Asking rents declined 7% year-over-year, closing out 2019 at a weighted average asking rent of $34.50 per sq. ft. The significant decrease was a result of WWE’s lease deal at 677 Washington, where asking rents were well above average.
Total leasing activity in Westchester County topped 932,000 sq. ft. for the year, a 3% increase over 2018 and the first year-over-year growth since 2015. Leasing momentum in Q4 reached 312,000 sq. ft., 12% above the five-year quarterly average and the strongest quarter of 2019.
“The flight-to-quality continues to drive leasing activity in Westchester County, with tenants seeking high-end space in the primary submarkets, predominantly in the I-287 Corridor where many buildings have received significant capital investment” said William V. Cuddy, Jr., an Executive Vice President at CBRE. “Healthcare occupiers had the largest share of leasing activity for Q4 as well as for the past two years, continuing to be one of the most important industries in the county.”
Relatively strong leasing momentum and few new availabilities drove year-end absorption to positive 355,000 sq. ft., the third consecutive year to end with positive net absorption. Westchester County’s year-over-year asking rent declined by 4.2% to $28.33 per sq. ft. as a result of expensive space being removed from the market through a combination of adaptive reuse and leasing.
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