‘hottest market in fairfield county:’ downtown greenwich sees major demand for office space
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By Paul Scott | Published on October 31, 2021
GREENWICH — The recovery of Fairfield County’s office-leasing market from the COVID-19 pandemic is gaining pace — and nowhere is seeing more momentum than the county’s most southwestern town.
Dubbed the “hottest market in Fairfield County” in a new report from commercial real estate firm CBRE, downtown Greenwich has proven this year its lasting appeal as an office location for major companies, particularly those in financial services. Boosted by its proximity to New York City and mass-transit connections, the central business district looks likely to maintain its popularity — a boon that could also benefit neighboring areas.
“The market has a single-digit availability rate, and its transit access and high-quality space should keep demand coming both from tenants already in the market and new entrants,” CBRE officials wrote in the report.
During the third quarter, the Greenwich central business district recorded a total of about 92,000 square feet in new leases and expansions of existing office space, according to CBRE. The tally represented a 161 percent jump from the district’s total in the second quarter and a 92 percent increase from the five-year quarterly average.
The availability rate now runs at about 9 percent in the Greenwich central business district whose “market rentable area” covers about 2.1 million square feet of office space. In comparison, the entire Fairfield County market has a 26 percent availability rate for its approximately 41 million square feet of offices.
“While there are a number of different reasons for the success in Greenwich, it should also be noted that it is a small market and it doesn’t take a lot of activity to make a huge impact on it statistically,” said David Block, a Stamford-based executive vice president at CBRE.
In arguably the most significant corporate arrival in the town this year, financial-technology firm iCapital Network last month opened offices at 2 Greenwich Plaza, which is steps from the downtown Metro-North Railroad station and next to Interstate 95. The new offices stand about 30 miles from iCapital’s headquarters in Manhattan, at E. 42nd St., across the street from Grand Central Terminal
While iCapital originally planned to bring about 200 jobs to the state, company officials now anticipate that the number of Greenwich-based employees could rise to approximately 300 during the next two years.
As a result, its footprint is increasing at 2 Greenwich Plaza. It recently signed up for about 25,000 square feet in additional space, raising its eventual occupancy to around 65,000 square feet.
“From the perspective of attracting more employees, Greenwich would give us access to employees that we would (otherwise) struggle to access,” iCapital CEO and Chairman Lawrence Calcano said. “We think having this location really expands our potential employee base.”
During the past quarter, downtown Greenwich recorded several other major new leases — including One Rock Capital, which took 13,000 square feet at 1 Greenwich Plaza — while several other financial-services firms expanded their existing offices, according to CBRE.
The new leasing deals for iCapital Network, One Rock and several other finance firms will each run for more than seven years, according to CBRE.
“Despite the natural fluctuations of the economy, central Greenwich has always been a desirable destination for businesses and for office space,” said Marcia O’Kane, CEO and president of the Greenwich Chamber of Commerce. “Since this area is dense with a wide variety of businesses, everyone benefits when leasing rates go up. Restaurants, catering, retailers and nightlife all enjoy a surge from having more consumers in the area who have a demand for these items.”
Area-wide impact
Real estate brokers and local officials are expecting more arrivals in the coming months.
“We’ve gotten interest from companies coming out of New York City because the folks who work there are experiencing Greenwich as residents and saying, ‘This might be a good place to locate my business,’” said Greenwich Selectwoman Lauren Rabin.
With space tight in the Greenwich CBD, other parts of Greenwich, as well as Stamford, could benefit as companies look for alternative locations.
“There’s not that much great space left in the Greenwich (central business district),” Block said. “So what we’re seeing is an incredible amount of activity in western Greenwich — like Greenwich Office Park, which we represent and where I think there are going to be a number of announcements before the end of the year on leases signed.”
The Stamford central business district, which has grappled for many years with high office vacancy rates, has ample capacity to accommodate any spillover: The availability rate for its approximately 10.4 million square feet of office inventory ran at 31 percent in the third quarter.
“I know there are also going to be some great announcements in the next few weeks about a handful of buildings in Stamford around the (downtown) train station that are going to see additional activity as a result of the dearth of quality available space in the Greenwich (central business district) at this point,” Block said.