Edwards & Angell, a large New England law firm with offices in Boston, leased 34,101 square feet at 3 Stamford Plaza in Stamford this past January.
While Greenwich had emerged as the leader in the commercial real estate market for 2002, it’s been off to a slow start in the first quarter of 2003, and the city of Stamford appears to be picking up some of the slack.
Despite the fact that Stamford had been in a slump for the past year, the first quarter has seen the city turn around its office market, garnering some of the largest leases in Fairfield County.
Dean Shapiro, executive director of Insignia/ESG in Stamford, said “Last quarter, four of the five largest deals in the county were in Stamford, many of which were, in my opinion, very notable deals.”
He added, “Stamford has taken a lot of shots lately, but it continues to be the recognized business center in Fairfield County. A number of significant transactions really highlighted that fact.”
In January, Edwards & Angell, a large New England law firm with offices in Boston, opened in Stamford. It leased 34,101 square feet at 3 Stamford Plaza.
Shipman & Goodwin, another major law firm, relocated within Stamford. It had previously held offices at One Landmark Square and recently moved to 300 Atlantic St.
“I think law firms of the ilk that we’re talking about need to be in the so-called capital of the county. Stamford is recognized in that regard. Greenwich is often seen as a leader, but it’s really a boutique market, as is Norwalk. Stamford is really the focal point of the county,” said Shapiro.
The Thompson Corp., an information services provider, reorganized several leases in Stamford in the first quarter as well. Its Thompson Learning division leased 55,287 square feet at 200 First Stamford Place.
Shapiro said XL Reinsurance also relocated into the city, leasing 40,000 square feet at Harbor Park, which is located at 333 Ludlow St. John Frieda Inc. leased 14,945 at Harbor Park as well. In another notable transaction, AmeriCares leased 25,000 square feet at 88-112 Hamilton Ave.
“This activity is atypical for the last 12 months, but isn’t historically atypical for Stamford,” he said.
Downtown Projects
Downtown Stamford is also home to several large development projects currently under way. Those include a 150,000-square-foot building that is the city’s largest single undertaking since the UBS Warburg headquarters at 677 Washington Blvd. was completed in 1997.
According to research conducted by Insignia/ESG, Fairfield County is beginning to turn a corner after a year of struggle with downsizing, mergers, acquisitions and generally slow business. Although the county is still laboring, especially compared to last year’s numbers, the first quarter of 2003 shows definite improvement over the last quarter of 2002.
A good deal of the progress came from a decidedly positive upturn in Stamford’s office market. Stamford was one of the areas of the county that was hardest hit by recession because of its reliance on many of the most economically affected industries. At the end of 2002, the city’s available space was just under 3 million square feet, or approximately 18 percent of its entire inventory. Sublease space in the city had grown to 35 percent of the city’s total availability.
However, there has been a turnaround in demand for space in several of the city’s major properties, and the creation of new space has been stabilizing. Consequently, as of the first quarter, leasing velocity had jumped to 161 percent higher than the fourth quarter of 2002 at 342,000 square feet, positive absorption totaled 116,570 square feet and availability was 4 percent lower at 2.9 million square feet. However, subleasing remains 35 percent of the total availability.
Insignia/ESG also reported that while the Stamford Central Business District is far from healthy, still exhibiting potential for downsizing and relocations out of the city, it has show signs of a more stable year.
Overall, Fairfield County enjoyed a decrease in sublease space throughout the first quarter. That caused a decrease in overall availability during the first three months of 2003, according to reports from Newmark & Company Real Estate in Greenwich.
Countywide, the sublet availability rate dropped from 7 percent to 6.8 percent, while direct availability crept up from 11.1 percent to 11.2 percent. The only two submarkets that saw availability fall were Stamford and Central Fairfield. Availability rose in the Northern Fairfield market, Eastern Fairfield and Greenwich.
Asking rents countywide dropped from $27.03 per square foot to $26.96 per square foot. In Greenwich, asking rents fell from $42.30 per square foot to $40.88 per square foot and are now down 11 percent from a year ago. Asking rents in Stamford fell from $31.11 per square foot to $30.60 per square foot; they are down 8 percent from the first quarter of 2002.
Greenwich, which was the major performer in 2002, got off to shaky start in the first quarter of this year. Several blocks of office space were returned to the market, totaling 204,940 square feet. That resulted in an increase in availability from 13.2 percent to 14.5 percent.
The second-largest lease of the quarter belonged to Advance Magazine Publishers, which took 45,636 square feet at 20 Westport Road in Wilton for the new headquarters of Golf Digest. The magazine is relocating its operations from Trumbull, which is also in Fairfield County. The largest lease was the Katherine Gibbs School, which took 64,550 at 10 Norden Place in Norwalk.
According to reports from Insignia/ESG, Fairfield County’s biggest impediment to recovery has been weak demand during the last two years. However, during the first quarter of 2003, that trend has seemed to change as all four segments of the county have improved compared to last quarter.
The last quarter of 2002 saw only 75 transactions, while the most recent quarter saw 115 completed deals.
