The 5-story building at 500 Summer St. in Stamford was sold for $3.45 million during the first quarter of this year. The deal was another coup for the city’s rebounding office market.

After a long period as the Achilles’ heel of the Fairfield County office market, Stamford continued its upward climb in the first quarter of 2005.

“Stamford is still the place to be,” said Bob Miller, a partner with Prudential Connecticut Commercial Real Estate in Stamford.

The rest of the county saw something of a slowdown during the first quarter, however. Slow job growth, the prospect of rising energy costs and slow economic recovery contributed to further volatility for Fairfield County’s office market in the first quarter, according to the quarterly report from CB Richard Ellis in Stamford. Leasing velocity fell compared to the first quarter of 2004 and absorption was negative. The forward momentum that was generated last year stalled because of pressure from limited new hiring and conservative new requirements, according to the report.

But the vacancy rate in the county for Class A office space decreased slightly from 15.5 percent in the last quarter of 2004 to 14.8 percent in the first quarter of this year, according to Stamford-based Albert B. Ashforth Inc. That compares to a vacancy rate of 16.1 percent in the first quarter of 2004.

Still, Stamford clearly was a bright spot. The leasing velocity there went up 253 percent from last year, to almost 598,000 square feet, or 59 percent of Fairfield County’s activity in 2005. Those leases included a 36,782-square-foot space at 400 Atlantic St. that was leased to UBS AG, a 36,720-square-foot space at 680 Washington Blvd. that was leased to Gerald Metals and a 26,541-square-foot space at 333 Ludlow St. that was leased to NYFIX Inc. Much of that activity came from Stamford tenants who chose either to remain in the city or to expand. Stamford saw positive absorption of 18,370 square feet, a difference from years past, when the city often lost tenants.

Businesses are attracted to Stamford for the same reasons they have always been, according to Miller. The city is well positioned with easy access to transportation to New York City and to the rest of Connecticut, he noted.

A Good Investment

Sales were also strong in Stamford and throughout Fairfield County, Miller added.

“The sales market continues to be white hot,” he said.

Miller brokered the $3.45 million sale of a 30,500-square-foot building at 500 Summer St. in Stamford during the first quarter. That deal marked the third time Miller has sold that building after his involvement in its sales in 1997 and 2000.

The 5-story office building, which includes a penthouse and first-floor retail space, was built in 1960 by the F.D. Rich Co. It was that company’s headquarters in the 1960s and early 1970s.

“We’ve sold a lot lately,” Miller said.

Sales have been strong lately because of company owners’ desire to control space costs and because of continued low interest rates. Real estate continues to be a good investment, Miller said.

“It seems like every time Wall Street hiccups, people run to real estate,” he said.

Miller also brokered the sale of a 90,000-square-foot building in Danbury. The building at 100 Mill Plain Road sold for $14.9 million.

In addition, relocations were up in the first quarter of this year, according to CB Richard Ellis.

“A high correlation to the general economy continued to cause volatility, as well as slow tenant demand, in Fairfield County in the first quarter of 2005,” according to the company’s quarterly report. “Aside from GE Capital’s commitment to move its 1600 Summer St. [Stamford] operation to 777 Long Ridge Road [also in Stamford], nothing resembling Diageo or FactSet’s large-scale leases of last year took place, causing a dip in demand totaling 10 percent.”

As a result, the leasing of space exceeding 50,000 square feet fell 49 percent in the first quarter to 267,600 square feet, or 26 percent of the county’s total activity.

Commercial real estate brokers are hopeful that the office market will improve throughout the rest of this year.

“[The] progress in Stamford bodes well for Fairfield’s overall performance in the near future, and a sustained county-encompassing stability will be a welcome change to a market where pockets of strength have provided activity, but not a lot of long-term growth,” according to CB Richard Ellis.

Miller said he has noticed a lot of business owners looking at smaller-sized buildings. Business in general is getting better, so many of his clients are changing their concentration from controlling costs to growth.

“We think ’05 is going to be a good year for office space,” Miller said.