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Despite the soft market fundamentals in the office real estate market in both counties, Cushman & Wakefield's agents still had a successful year.
“When you look at annual office leasing activity averages in Fairfield County over five-year periods, there are notable differences,” said Jim Fagan, senior managing director and market leader of Cushman & Wakefield’s Fairfield and Westchester County regions. “Between 2009 and 2013, the average annual leasing was just over 2.2 million square feet. That’s a 27 percent difference when compared with the 3 million square feet leased annually during the five years prior.
“In Westchester County, averages were lower,'' Fagan said. "From 2009 to 2013, 1.2 million square feet was leased, which was a decrease of 33 percent versus the five years prior.”
According to Cushman & Wakefield’s Research Department, the office real estate market remained challenged in 2013 due to a variety of factors: Weak office-using employment growth prevented the local office real estate sector from a significant recovery. Corporations continued to make their spaces denser, increasing their employee-to-square-foot ratio for space usage, thereby reducing their square footage requirements.
Finally, due to shifts in demographics and market recovery, new jobs have been disproportionately located in gateway cities, such as New York, Chicago and San Francisco, creating a vacuum in the suburbs.
While new demand in the office real estate sector remained somewhat stagnant in 2013, there was significant demand in the medical/healthcare, retail and multi-family residential real estate sectors. Large hospitals are merging and acquiring smaller practices in order to increase efficiencies and lower costs. Healthcare providers are also looking to expand into under-supplied locations via satellite locations.
Locally, Class-B and C office buildings are being re-purposed for medical use and there has been an increase in the construction of medical buildings in order to accommodate new healthcare technology.
In the retail sector, occupancy rates and pricing in high-street retail locations, such as Greenwich and the White Plains CBD, have steadily increased over the last few years. As a result, asking rental rates for luxury retail locations are expected to experience double-digit percentage growth within the next few years.
Cushman & Wakefield represented prominent tenants in 2013, such as: Boehringer Ingelheim Pharmaceuticals, Inc., General Electric, Sikorsky Aircraft, Western Connecticut Health, Gartner, Inc., Yale-New Haven Health, FactSet and Pitney Bowes.
On the landlord side, more than a half a million total square feet were leased for notable firms, such as: Tishman Speyer, Rugby Realty, Summit Development/Grossman Companies, The Silverman Group, Lighthouse Realty, Edgewood Capital, Beacon Capital, Cohen Brothers, and TIAA-CREF. On the sale-disposition side, C&W represented Kraft Foods in the $33-million sale of 555 South Broadway in Irvington, N.Y. to Irvington Central Montefiore Medical Center.
Click here for a look at some of C&W's top local brokers in 2013.
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