Image courtesy of RFR

A new analysis of occupancy data by commercial brokerage Avison Young finds that the bigger an office building is in Fairfield County, the more empty it continues to be.

The company’s researchers said the split between properties bigger than and smaller than 100,000 square feet started at the end of 2018, and accelerated over the course of the pandemic, with bigger buildings seeing a 28.9 percent availability rate so far this quarter, with smaller office buildings between 20,000 and 100,000 square feet seeing a 15.8 percent vacancy rate.

Broken down even further, buildings with 250,000 square feet or more have a 28.1 percent availability rate and those between 100,000 and 250,000 square feet saw a 29.8 percent availability rate. By comparison, buildings between 50,000 square feet and 100,000 square feet are seeing a 17.8 percent availability rate and those between 20,000 and 50,000 square feet are seeing a 13.8 percent availability rate.

Availability rates in the three smallest categories have been somewhat stable since the middle of 2022, with buildings below 100,000 square feet seeing modest increases in occupancy since then.

The Avison Young researchers blamed the trend on “the increasing normalization of hybrid office cultures” opening the door for larger tenants to reduce their footprints.

Commercial brokerage CBRE’s fourth-quarter 2023 report said that office space being converted to other uses is also helping drive down vacancy rates.

The brokerage reported office leasing ticked up in Fairfield County as last year came to a close, with 419,000 square feet of activity – around 20 percent of that in downtown Greenwich. However, that level of leasing activity was still 31 percent below the 10-year average and 16 percent behind 2022, CBRE said.

Much of that leasing activity was concentrated in class A buildings, but the market’s average asking rent had softened slightly on a year-over-year basis but essentially flat quarter-over-quarter. Rents in downtown Stamford and downtown Greenwich were both up 4 percent and 6 percent respectively, year-on-year.

These trends are taking place amid a modest increase in Southwest Connecticut’s overall jobs total and a parallel slight decline in the number of employees at office-user firms.