RESEARCH 2Q 2018

FAIRFIELD COUNTY
OFFICE MARKET
NEW LEASES CARRY DEMAND, CURRENT CONDITIONS
BUT BIG BLOCKS WEIGH ON Year-to-date gross leasing activity totaled 1.5 million square feet, 18.5%
ABSORPTION lower than the total leasing volume tracked through the first half of 2017.

Overall availability increased marginally to 25.9%, from the 25.8% rate

Market fundamentals in Fairfield County remained relatively flat
recorded both last quarter and last year.
through the first half of 2018. Overall availability increased marginally
to 25.9%, from the 25.8% rate recorded both last quarter and last year. Pricing remained stable at $36.57/SF but there was a 4.2% decrease
Year-to-date gross leasing activity totaled 1.5 million square feet, reflected in the average asking rent over the past year.
74.4% of which involved new transactions. This represented an
increase of 25.8% in new deals from the first half of 2017. Renewal MARKET ANALYSIS
activity comprised only 25.6%, compared with 51.8% of the total
activity tracked during mid-year 2017. As a result of fewer renewals, Asking Rent and Availability
total leasing activity ended 18.5% lower than the total leasing volume
tracked through the first half of 2017.
$39 28%

$37 25%
Pricing remained stable through the second quarter, with a slight 0.3%
increase to $36.57/SF. However, there was a 4.2% decrease reflected $35 22%

in the average asking rent over the past year, the result of the removal $33 19%
of higher-priced blocks, mostly in Greenwich, coupled with the addition $31 16%
of a 275,000-square-foot, lower-priced sublease offering from GE
$29 13%
Capital Finance in the Stamford Non-Central Business District during 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18
the first quarter. Average Asking Rent (Price/SF) Availability (%)

Leasing Momentum in Downtown Greenwich Continues

Net Absorption (SF, Millions)
In the past 12 months, the Greenwich CBD submarket has absorbed
nearly 250,000 square feet of office space. The majority of this activity
600
derived from internal growth of companies, including Interactive
200
Brokers, AQR Capital and JP Morgan Private Banking, which have
added to their footprints within the past year. Most recently, two blocks -200

of space totaling 40,000 square feet that had stood on the market for -600

many years came offline at 600 Steamboat Road. Elridge Industries, a -1000
spinoff of Guggenheim, and Eagle Point Credit Company each leased -1400
20,000 square feet at the property. Another company that recently 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 2Q18

expanded was U.S. Trust Bank of America Private Wealth, which took
an additional 10,500 square feet at 55 Railroad Avenue, bringing its MARKET SUMMARY
total occupancy at this property to 16,800 square feet. Current Prior Year Ago 12 Month
Quarter Quarter Period Forecast
Limited Options in Greenwich Driving Stamford Relocation Trend Total Inventory 41MSF 41MSF 41MSF 
All in all, leasing activity in Greenwich CBD has more than doubled, Availability Rate 25.9% 25.8% 25.8% 
from 80,000 square feet leased during the first half of 2017 to nearly
Quarterly Net Absorption (45,256) (267,149) (122,006) 
190,000 square feet leased year-to-date. Consequently, the Greenwich
CBD showed the largest decrease in Class A availability, from 22.7% Average Asking Rent $36.57 $36.45 $38.19 
last year to 8.5%. The limited options in Downtown Greenwich are Under Construction 0 0 0 
already causing a growing number of tenants to consider relocating to
Deliveries 0 0 0 
neighboring Stamford.
© NEWMARK KNIGHT FRANK | 2018 RESEARCH | 1
2Q 2018 FAIRFIELD COUNTY OFFICE MARKET

In fact, such relocations already constitute a trend: Since the start of
2017, relocations from Greenwich accounted for roughly 164,000 square
feet of leasing tracked in Stamford. As options continue to dwindle, it is
likely more tenants will opt for Stamford.
Higher Leasing Volumes in Stamford CBD, Norwalk and Danbury
Year-to-date, leasing volumes in Stamford CBD, Norwalk and Danbury
surpassed levels seen in the first half of 2017, while the Greenwich Non-
CBD, Stamford Non-CBD, Central and Eastern markets saw their leasing
volumes drop by comparison. The Stamford CBD registered 390,000
square feet of leasing, up 14.3% over the past year. The largest lease of
the second quarter was signed by Black Diamond Capital Management,
which took 22,948 square feet at 2187 Atlantic Street. Although demand
in Norwalk remains sluggish, mid-year 2018 totals were four times higher
than in 2017, the result of FactSet’s 173,000-square-foot lease at 45
Glover Avenue. In Danbury, demand was highlighted by Owl Cyber
Defense Solutions’ 30,230-square-foot lease at 42 Old Ridgebury Road.
Leasing in the Greenwich Non-CBD totaled 67,000 square feet, compared
with 261,000 square feet reached at midyear 2017. Excluding Blue Sky
Studios’ 147,000-square-foot renewal, which was included in last year’s
total, the Greenwich Non-CBD’s totals would still lag behind last year’s by
41.4%. Both the Stamford Non-CBD and the Eastern markets saw leasing
levels drop by almost 50.0% from a year ago and the Central market saw
a 9.6% decrease during the same period.
Vacancy Remains on High Ground as Supply Outpaces Demand
Since the beginning of this year, the county has lost 312,405 square
feet in occupied space, most of which was centered in the Stamford
Non-CBD.
This submarket lost 304,100 square feet through the first half of 2018,
mostly because of GE Capital Finance’s addition of 275,000 square
feet at 800 Long Ridge Road and the recent addition of KPMG’s 40,000-
square-foot space at 3001-3003 Summer Street. As a result, availability
in this submarket increased to 37.6%, from 36.7% in the previous
quarter and 34.8% in the prior year.
Finance and TAMI Firms Drive Demand; Medical Remains
in Hiatus
Although the county’s tenant makeup has increasingly diversified over
last few years, the finance and insurance industries remain the leading
business sectors. Combined, this sector captured 32.0%, or 476,000
square feet, of total demand, on par with last year. However, whereas
insurers accounted for much of the activity in the first half of 2017,
finance firms have dominated this year with 29.0%, compared with
14.0% a year ago. TAMI tenants (technology, advertising, media and
information) captured 29.0%, or 434,000 square feet of demand,
versus 19.0% in the first half of 2017. Within the TAMI sector,
technology firms saw a large increase from roughly 2.0% last year to
22.0%. This jump was mostly the result of the 173,000-square-foot deal
that FactSet, a tech-related company, signed in the first quarter. By
contrast, media tenants, which comprised approximately 16.0% of
activity at this time last year, have comprised only 3.0% this year. The
professional and business services sector have seen demand decline
this year to approximately 163,000 square feet, or 11.0%, compared
with 258,000 square feet a year ago. Within this sector, demand by
legal services have increased from 1.2% last year to 4.0% this year.
Medical and healthcare-related tenants remain in hiatus mode. This
sector has declined by 53.2% since midyear 2017, capturing only 6.5%
of the overall activity.

Top Mid-Year 2018 Lease Transactions

Tenant Address Market/Sublease Type Square Feet

FactSet 45 Glover Avenue South Central New Lease 173,164

Energizer Personal Care Products 6 Research Drive Eastern Renewal 55,186

Charter Communications 201 Tresser Boulevard Stamford CBD Sublease 53,482

Survey Sampling International 6 Research Drive Eastern Renewal 47,765

Merrill Lynch 2 Pickwick Plaza Greenwich CBD Renewal 36,582

Cenveo 200 First Stamford Place Stamford CBD Renewal 30,762

Select Mid-Year 2018 Sale Transactions

Building Submarket Sale Price Price/SF Square Feet

1 Gorham Island Central $23,250,000 $569 40,897

70 Main Street South Central $3,150,000 $247 12,778

1 Eliot Place Central $5,050,000 $202 25,000

131 Danbury Road South Central $9,225,000 $173 53,482

© NEWMARK KNIGHT FRANK | 2018 RESEARCH | 2

2Q 2018 FAIRFIELD COUNTY OFFICE MARKET

SUBMARKET STATISTICS
Total Under Total Qtr YTD Direct Sublet Total
Inventory Construction Availability Absorption Absorption Asking Rent Asking Rent Asking Rent
(SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)

Greenwich 4,418,272 - 15.40% 35,063 38,958 $52.33 $57.98 $52.33

Stamford 16,211,992 - 33.70% -138,649 -305,495 $43.34 $39.44 $43.34

South Central 7,494,685 - 27.50% -16,432 -89,436 $31.20 $30.72 $31.20

Central 2,092,867 - 20.40% -28,487 -31,984 $37.83 $28.02 $37.83

Eastern 7,026,521 - 17.00% 83,916 69,911 $17.49 $14.02 $17.49

Northern 3,748,766 - 21.50% 19,333 5,641 $23.10 - $23.10

Fairfield County 40,993,103 - 25.90% -45,256 -312,405 $36.57 $35.92 $36.57

SUBMARKET STATISTICS- Class A

Total Under Total Qtr YTD Direct Sublet Total
Inventory Construction Availability Absorption Absorption Asking Rent Asking Rent Asking Rent
(SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)

Greenwich 3,881,963 - 15.50% 44,476 47,704 $52.15 $57.98 $52.15

Stamford 13,956,392 - 34.00% -137,046 -331,601 $46.39 $40.04 $46.39

South Central 5,571,689 - 23.90% -22,159 -90,896 $34.40 $30.72 $34.40

Central 1,255,881 - 14.20% -34,874 -25,235 $43.82 $32.00 $43.82

Eastern 4,485,572 - 12.10% 25,936 17,674 $20.68 $14.02 $20.68

Northern 3,252,257 - 22.40% 20,623 836 $23.56 - $23.56

32,403,754 - 25.10% -103,044 -381,518 $40.70 $36.26 $40.70

Fairfield County

SUBMARKET STATISTICS –Class B

Total Under Total Qtr YTD Direct Sublet Total
Inventory Construction Availability Absorption Absorption Asking Rent Asking Rent Asking Rent
(SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF)

Greenwich 536,309 - 14.90% -9,413 -8,746 $53.69 - $53.69

Stamford 2,255,600 - 31.40% -1,603 26,106 $26.50 $27.37 $26.50

South Central 1,922,996 - 37.90% -5,727 1,460 $26.52 - $26.52

Central 836,986 - 29.60% 6,387 -6,749 $34.26 $19.00 $34.26

Eastern 2,540,949 - 25.60% 57,980 52,237 $14.97 - $14.97

Northern 496,509 - 16.00% -1,290 4,805 $18.94 - $18.94

8,589,349 - 29.00% 57,788 59,113 $25.00 $26.37 $25.00

Fairfield County

© NEWMARK KNIGHT FRANK | 2018 RESEARCH | 3

2Q 2018 FAIRFIELD COUNTY OFFICE MARKET

ECONOMIC CONDITIONS EMPLOYMENT BY INDUSTRY

The preliminary Connecticut nonfarm job report by the U.S. Bureau of
Labor Statistics shows the state grew by 4,100 jobs (0.2%) in May 2018 Bridgeport-Stamford-Norwalk Area
to 1,690,700, seasonally adjusted. This increase made up for most of
the decline seen during March and April. Both the retail trade and
finance sectors are now ahead of last year’s pace. Construction
3.4%
Five of the 10 major industry sectors showed employment gains in 10.7% 7.1% Manufacturing

May, while four declined. Trade, transportation and utilities led growing 4.3% Trade, Transportation &
Utilities
industries with 2,600 new jobs, or 0.9%. Both education and health Information
10.8% 17.0%
services and leisure and hospitality gained 500 jobs. The finance Financial Services
sector gained 400 jobs, or 0.3%. By comparison, employment in 2.9% Prof. & Business Services
construction retracted by 300 jobs (negative 0.5%), while professional 14.8% Education
services and information each lost 200 positions. 9.9%
Healthcare
3.1%
15.8%
As of May 2018, Connecticut’s unemployment rate remained Leisure & Hospitality

unchanged at 4.5%. Fairfield County’s unemployment rate stood at Other

4.1%, down from 4.5% at this time last year.

Source: U.S. Bureau of Labor Statistics

UNEMPLOYMENT RATE PAYROLL EMPLOYMENT

Not Seasonally Adjusted Total Nonfarm, Not Seasonally Adjusted, 12-Month % Change

12%
3%
10% 2%
8% 1%

6% 0%

4% -1%

2% -2%
May-13 May-14 May-15 May-16 May-17 May-18 May-13 May-14 May-15 May-16 May-17 May-18

United States Bridgeport-Stamford-Norwalk United States Bridgeport-Stamford-Norwalk

Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics

CONSUMER PRICE INDEX (CPI) EMPLOYMENT GROWTH BY INDUSTRY

All Items, 12-Month % Change, Not Seasonally Adjusted, NYC, May 2018, 12-Month % Change, Seasonally Adj.

6%
Total Nonfarm
4% Construction
Manufacturing
2% Trade, Transportation & Utilities
Information
0% Financial Services
Prof. & Business Services
-2% Education
Healthcare
-4% Leisure & Hospitality
May-13 May-14 May-15 May-16 May-17 May-18 Other
Government
United States NY-NJ-CT-PA -4.0 -2.0 0.0 2.0 4.0 6.0

Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics

© NEWMARK KNIGHT FRANK | 2018 RESEARCH | 4

2Q 2018 FAIRFIELD COUNTY OFFICE MARKET

KAROLINA ALEXANDRE Fairfield County, CT Westchester County, NY

Research Manager 680 Washington Boulevard 800 Westchester Avenue
203.531.3609 Stamford, CT 06901 Rye Brook, NY 10573
kalexandre@ngkf.com 203.531.3600 914.881.1024

Newmark Knight Frank has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in our data, there may be adjustments in
historical statistics including availability, asking rents, absorption and effective rents. Newmark Knight Frank Research Reports are available at www.ngkf.com/research

All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Knight Frank (NKF) has not verified any such information, and the same
constitutes the statements and representations only of the source thereof, and not of NKF. Any recipient of this publication should independently verify such information and all other information
that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient’s choice with regard to all aspects of that
decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of NGKF, distribute, disseminate, publish,
transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.

© NEWMARK KNIGHT FRANK | 2018 RESEARCH | 5