Gubner says that while there are "precarious economic signs" of a slowdown taking place, the impact of an economic downturn would not have that much of an impact on the Farifield County office market. "While many are expecting the worst, I am confident that with the real estate market's continually strong fundamentals, there will be a minimal softness in the region," Gubner says.
"In fact, Connecticut's Fairfield County is expected to continue to be one of the strongest markets in the Northeast," he notes, "fueled by an exceptional quality of life, a highly-skilled employment base, a tremendously diverse population and a commerce environment only rivaled by a few select suburbs across the country. In all sectors of the marketplace, including office, retail, industrial and investment properties, conditions continue to represent an excellent time to be either leasing or investing in the Fairfield County marketplace."
Gubner, in fact, terms the Fairfield County area as the most durable spot in the New York/New Jersey/Connecticut tri-state area. He notes that Fairfield County has an overall vacancy rate of approximately 6% and that there is still high demand for office space.
Asking rents are now averaging nearly $40 per sf for class A office space and $70 per sf for retail space. He adds that although rents in Fairfield County are higher than those in some sections of New Jersey and Westchester, rents in here are much cheaper than in Midtown Manhattan.
While there are developers marketing some new office development, there is little threat of an 1980s-like over development in the area, Gubner believes. "Almost 75% of the Fairfield County product was constructed within the last 20 years, allowing very little need for massive redevelopment," he says.
He notes that although there are a number of major office construction projects (over 250,000 sf) ready for development, only two have broken ground due mainly to tight financing requirements. "Developers continue to anxiously await an anchor tenant to first commit to a property, thus putting tremendous constraint on overbuilding in the market," he adds.
Other market characteristics that lead him to believe the market is in good shape include: a diverse tenant base, minimal exposure to the volatile high-tech sector and a stable investment environment. Three publicly-traded REITs control more than 50% of the class A space in the Fairfield County market.
Based on the strong fundamentals in the Fairfield County office market, the region should be able to withstand the ill winds of an economic downturn and experience a "soft landing in the uncertain times ahead," he says.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
