Fairfield County Office Market
After trending downward for six consecutive quarters, the overall availability rate moved back to 27.0%, up from 26.3% at the start of 2024. The direct vacancy rate hit a new record high of 18.9%, attributed to expiring leases and downsizing. Although several buildings slated for redevelopment have been removed from the office inventory, large occupiers such as Indeed, Henkel and Philips have reduced footprints this quarter, adding new supply to the market. Roughly a million SF of leases were transacted in the second quarter alone, bringing the YTD 2024 leasing volumes to nearly 1.6 million square feet, up 26.3% from midyear 2023. But while large deals buoyed total leasing volumes, they were a double edge sword, as some reduced their original footprints by half. Year-to-date net absorption therefore ended with negative 298,731 SF. With more leasing activity focused on higher-priced product and leaving behind availabilities with a lower price tag, the Class A direct average asking rate moved down slightly to $40.70/SF, while Class B rents remained stable at $29.46/SF.
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