Image courtesy of Google Maps

Fairfield County’s office market failed to regain momentum at the close of 2022, as leasing remained sluggish and vacancies ticked up to nearly 26 percent.

Additional sublease activity reflected declining demand for office space, Colliers reported in its fourth quarter market snapshot report.

Owners of lower-tier office properties may pursue conversions to other uses, Colliers researchers predicted.

“As companies continue to evaluate occupancy needs and utilization, expect the flight-to-quality trend to widen the gap between asset classes and pressure outdated properties to be renovated or converted,” the report stated.

Only two tenants inked leases larger than 40,000 square feet during the fourth quarter.

Hudson Bay Capital Management leased 47,325 square feet at 290 Harbor Drive in Stamford’s Shippan Landing office park, while Strategic value Partners leased 43,258 square feet at 100 West Putnam Ave. in Greenwich.

Overall leasing activity decreased nearly 29 percent from the previous quarter to 545,560 square feet.

Declining demand left its mark on asking rents, which declined 3 percent from the previous quarter to $32.83 per square foot county-wide.

Greenwich’s 4.4 million-square-foot office market has remained the most resilient – and highest-priced – submarket, with a current availability rate of 15 percent and average asking rents of $49.17 per square foot.

Stamford’s 10.7 million-square-foot north central business has the region’s highest availability rate of 32.1 percent, with average asking rents of $31.92 per square foot.