Executive Summary

First Half 2023

Fairfield Retail Owners Make Price Concessions

After three relatively strong quarters, Fairfield retail suffered a set-back in the second quarter of 2023. Landlords have been proactive in adjusting pricing to maintain the affordability of their offerings and leasing rates declined 5% during the second quarter as price declines accelerated, and 6% for the first half of the year. Leasing weakened but still managed to maintain a fairly good level of activity.

New eateries, such as DIG, a vegetable and protein based fast food restaurant for health-conscious customers that recently opened in Stamford and Haven Hot Chicken in North Heaven are examples of new eateries that are trying to establish a faithful following in Fairfield.

Fairfield’ retail sector has also proven to be attractive for investors. A large Bridgeport grocery anchored shopping center caught the attention of a savvy shopping center investor, resulting in a $46 million purchase transaction completed in the first half of 2023.

Greater Fairfield Office Owners Experience Headwinds

In contrast to Greenwich, the greater Fairfield office markets is showing occupancy weakness despite relatively stable pricing trends. Class A office space, particularly in Stamford, is performing better and helping raise pricing averages. Occupancy is vulnerable and office departures have exceeded newly signed leases over the last few quarters.

According to CBRE and the CT insider, Biotechnology firm Cara Therapeutics and a not disclosed insurance company, signed leases for over 26,000 square feet and close to 100,000 square feet at 400 Atlantic St. The 500,000 square-foot building’s owner was pleased to sign these new tenants after losing Charter Communications. These are examples of the greater appeal that well located office space, offering amenities and parking, has in the current market.

Investment Transactions at a Depressed Level

Scarce debt financing, wide bid-ask transaction spreads and investor’s belief that we are not yet at the top of the tightening cycle are combining to deter investment transactions. Despite all these headwinds, Fairfield transaction volume increased during Q2 2023 and median per square foot price, embedded in transactions, did not weaken.

Houlihan Lawrence Commercial Team

Interesting commercial real estate investment opportunities will likely become available in the near future given the number of properties that will need to be refinanced in a vastly different interest rate environment. Liquidity is restrictive and poorly capitalized owners will seek to sell. However, there are numerous market and economic risks that will add to the complexities of acquiring commercial real estate. Understanding the market forces that are shaping the fundamentals for each property requires a deep knowledge of the property, local and regional insights, and close contacts with the right financial partners. Our Team is highly skilled in all these areas.

Reach out to HOULIHAN LAWRENCE COMMERCIAL for a complementary assessment of your real estate, an evaluation of a purchase target, and to receive an in-depth perspective on the dynamic Westchester commercial real estate market.