800 Long Ridge Road in Stamford/Image courtesy of Stamford Assessors

Demand for Fairfield County office space remained “tepid” in the first quarter as leasing activity declined and landlords explored alternative uses including residential development.

In March, Stamford-based Building and Land Technology submitted plans to convert its 800 Long Ridge Road office building in Stamford into 354 residential units, which will remove 275,000 square feet of office space from the local inventory.

More than 2 million square feet of functionally obsolete office space in a dozen Fairfield County buildings could be converted into housing, brokerage Collier reported in its first-quarter market report.

“As companies in Fairfield County continue to optimize their office space needs, the market faces ongoing pressure,” Colliers researchers wrote.

The search for alternative uses reflects a 34 percent decline in office leasing within the nearly 44-million-square-foot countywide office market, according to Colliers data.

Total leasing activity was 317,108 square feet in the first quarter, down from 479,027 square feet in the fourth quarter. The availability rate declined from 23.7 to 22.9 percent, reflecting the removal of space slated for residential conversions.

Average asking rents declined from $32.52 to $32.21 per square foot.

Renewals continue to dominate the largest lease transactions, with companies gravitating toward class A properties with amenities in central locations, according to the report.

The preference for high-end properties could generate demand for two new office projects, a redevelopment of the Corbin District in downtown Darien by Baywater Properties, and a 230,000-square-foot office building named Constitution Square in Shelton.

But additional distress is likely as lenders take action against landlords of underperforming properties, Colliers predicted, following Empire State Realty Trust’s recent decision to hand back the First Stamford Place property to its lender.