Downtown Greenwich has Connecticut’s priciest office space, with average asking rents of over $107 per square foot. Pictured is 240 Greenwich Ave., where aircraft leasing company Sky Leasing leased 5,576 square feet this month. Image courtesy of CBRE
Office tenants gravitated toward suburban leases in Hartford County this spring, while Fairfield County’s downtown districts continue to attract the highest rents and demand.
In Greater Hartford, the suburban submarket captured the most leasing activity during the second quarter, CBRE reported. Hartford County tallied the highest leasing totals in two years at 247,000 square feet. The 3.3 million square-foot south suburban market, which includes Rocky Hill, now has the highest average asking rents at $23.13 per square foot.
Downtown Hartford’s office market has nearly 175,000 square feet of negative absorption in 2025, and an availability rate of 24 percent. Uncertainty about the future ownership of large office buildings may be inhibiting leasing activity, CBRE Senior Vice President Michael Puzzo said.
“There continues to be varying levels of landlord distress, which has been well publicized,” Puzzo said. “That is making transactions increasingly difficult to structure, particularly when a lender is involved in the decision-making on how to structure a transaction. It depends upon the loan covenants, but we are seeing more instances when a lender has to approve a transaction in a building that is relatively healthy.”
Boston-based Paradigm Properties, owner of the 885,000 square-foot CityPlace I office tower at 185 Asylum St., fell behind on its mortgage payments to Wilmington Trust, which received court approval in February to turn the property over to a receiver.
And M&T Bank is trying to sell a $28-million mortgage secured by the 30-story Goodwin Square office tower at 225 Asylum St., according to a Hartford Business Journal report.
At the same time, the Hartford South submarket has over 137,000 square feet of positive absorption in 2025, bringing its availability rate down to 16.4 percent. That’s the lowest of all the major Hartford County submarkets. Tenants inked 96,000 square feet in Rocky Hill, according to CBRE data.
Downtown Hartford properties attracted just 18,000 square feet of leases, down 60 percent from the 2-year average.
Many of the second quarter transactions were driven by pending lease expirations in 2026, Puzzo said. Many office tenants continue to prefer short-term lease extensions, and landlords have been accommodating them, he said. Renewals also eliminate upfront buildout costs when a company relocates.
“Tenants continue to be very cautious on their long-term office space needs,” Puzzo said.
Fairfield County Downtowns Remain in Demand
The Harford market is a contrast to occupancy trends in the Fairfield County market, Connecticut’s largest office cluster with over 38 million square feet of office space.
Tenants have gravitated toward downtown locations, particularly in Stamford and Greenwich, located near transit and amenities, in the past decade, and recent market activity reflects the same pattern.
Downtown Greenwich continues to be attractive to smaller financial services and investment firms, CBRE Executive Vice President David Block said, driving the submarket’s vacancy rate down to a county-low 8.3 percent. Average asking rents are a county high of $107.82 per square foot.
“The trends that we have witnessed for a number of years have continued, and that really is financial services firms gravitating to downtown Greenwich, suburban Greenwich and the heart of Stamford,” Block said.
Countywide, the availability rate dropped during the second quarter from 25.4 to 25 percent.
In a continuation of post-COVID trends, most tenants tend to shrink their footprints by 20 to 40 percent when renewing or relocating, Block said.
“Anecdotally we’ve heard stories and directly from some clients that they need to now take additional space and they downsized too much, but not so much since they get back to the initial footprints,” Block said.
Economic uncertainty about the effects of tariffs appeared to place a damper on tenants’ requirements and building tour activity early in the quarter, Block said.
Three of the second quarter’s five largest leases were in downtown Stamford, including a 55,643 square-foot renewal by law firm Cummings & Lockwood LLC at 6 Landmark Square and a 23,062 square-foot renewal by Morgan Stanley at 4 Landmark Square.
Sublease listings have shrunk from a peak of 2.5 million square feet in mid-2022 to 1.2 million square feet. The decline is attributed to expirations of direct leases and space removed due to residential conversions, along with new leasing transactions, according to CBRE’s second-quarter report.
