Reports on the New Haven County Office Market for the fourth quarter of 2001, released by area brokerage firms Insignia/ESG and Traub & Company, LLC, show that this market is holding its own at the moment.
Dean Shapiro, executive director of Insignia/ESG's Westchester/Connecticut operation, says that New Haven County's mixed results for year-end 2001 "are a strong indication that while the unusual surge of activity is definitely over, New Haven's stable corporate base provides the county an anchor on which it can depend even in slower times. No wild swings for New Haven--and that's a good thing when compared to other domestic markets."
Insignia/ESG reports that although activity fell after the terrorist attacks of Sept. 11, overall office availability in New Haven County fell just a half a percentage point by year-end 2001 to 17.5 percent as compared to 1999. As compared to the record-breaking leasing activity posted in 2000 though, New Haven County's office availability rat rose almost three percentage points and the amount of overall lease deals dropped a whopping 49 percent in 2001.
The markets surrounding New Haven's Central Business District struggled last year, while the downtown New Haven office market held its own, although its availability rate rose to 19.7% at year's end, according to Insignia/ESG. The market was affected by corporation decisions to put excess space on the sublease market and put on hold any expansions or relocations. Due to those issues, the average asking rent countywide fell three percent in 2001, as compared to a year earlier, to $18.05 per sf.
Carl Traub, president of Traub & Company, LLC, notes that while overall vacancy rates in downtown New Haven and countywide are in the high teens, available Class A space is at a premium. He notes that in 2001, the Class A vacancy rate in the central business district of New Haven rose two percentage points to eight percent. Countywide rates for Class A space remained stable at 5.5 percent at year's end 2001.
While acknowledging last year's slowdown, Traub says, "Overall the market is healthy. In the downtown (New Haven) district there is a shortage of Class A space." He adds that the addition of 370 James St., a 186,000-sf-office building, formerly occupied by sport apparel firm Starter Corp., will help satisfy the current demand for Class A space in the city.
The market should also be stable this year because he does not see any major Class A office construction project beginning in the near future.
In the firm's report on the New Haven office market for the fourth quarter 2001, Traub officials note that area brokers have noticed a pickup in activity late last year and into 2002. While characterizing current market conditions as "very healthy and relatively stable" the company concluded its report with the following open-ended statement: "The only question that remains is will the real estate market gain momentum or continue its slow readjustment to more normal activity? It's too early to know for certain, if, the worst is behind us or in front of us."
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
