Property Rounds: Commercial Large buildings push market forward
Southwestern Connecticut’s commercial real estate market lurched into motion on multiple fronts in the third quarter, with buyers surfacing for two big, underutilized office buildings in Danbury and Trumbull, and the former UBS building landing its first major replacement tenant.
Fairfield County had a 23.3 percent office vacancy rate as of the third quarter of this year, according to the Stamford office of commercial brokerage firm JLL, with leasing activity picking up significantly in downtown Stamford, where nearly 140,000 square feet of space was filled on a net basis.
It was a quarter in which cable giant Charter Communications made official a lease it had already revealed for a 500,000-square-foot office tower adjacent to the Stamford Transportation Center that will be constructed by Building & Land Technology; with smaller Stamford deals including Gartner adding an extra 55,000 square feet of space near its Top Gallant Road headquarters; and KPMG becoming the first to secure space in the former UBS building at 677 Washington Blvd.
After years of struggling to fill the cavernous Matrix Corporate Center in Danbury, in August the firm controlling the office complex found a prospective buyer in Felix Charney, head of Fairfield-based Summit Development. Court documents listed the deal at $17.8 million; as of October, the city of Danbury had yet to report any completed transaction on the complex. Matrix Realty Group had purchased Matrix Corporate Center in 2007 for more than $80 million, with the property undergoing a foreclosure proceeding after the 2016 death of the company’s founder.
In September, Matrix Realty Group reached a separate, $16.5 million agreement with Greenwich-based Hanover Real Estate Partners to sell its only other local office building, at 535 Connecticut Ave. in Norwalk. The building is the headquarters office for Crius Energy and several smaller businesses.
And in Trumbull, the former Oxford Health Plans headquarters at 48 Monroe Turnpike will be converted into a senior living community by Senior Living Development and Silver Heights Development.
In Westport, the private equity investment firm Gemspring Capital is the first tenant at 54 Wilton Road, a new office building at the site of the former headquarters property of Save the Children, in a redevelopment called Bankside at National Hall led by David Adams Realty, with Gemspring occupying more than 10,000 square feet of space.
Next door, BNY Mellon has moved its Westport wealth management office out of the National Hall complex, relocating the office to a BNY Mellon building at 10 Mason St. in Greenwich, where JLL calculates a vacancy rate of less than 7 percent in the central business district.
In Shelton, 127,000 square feet of office and warehouse space at 710 Bridgeport Ave. was leased to medical supply company and distributor A to Z, which plans to relocate its corporate office and distribution operations from New York.
“The lease is very indicative of a tightening in the industrial warehouse market for eastern Fairfield County,” said Chris O’Hara, senior vice president of Coldwell Banker Commercial NRT in Wilton, which announced the transaction last month.
O’Hara said that the warehouse market has tightened this year as e-commerce companies continue to purchase and lease sites for their storage operations, with only a finite inventory of available properties. E-commerce titan Amazon’s ongoing construction of its 1.2 million-square-foot warehouse space in North Haven is a prime example, according to O’Hara.
“In the market that is a really good thing for real estate,” O’Hara said. “It’s a blessing and a curse because the lack of space that’s out there now is primarily due to nobody building anything over the last two or three years.”
Includes reporting by Chris Bosak and Paul Schott.
Alex.Soule@scni.com; 203-842-2545; @casoulman