Fairfield County: Office Revamps Result in Tenancy Shift
Fairfield County, Connecticut, which has traditionally been home to many multi-national financial tenants, is transitioning to become one of the most diverse business environments in the region and attracting some of the biggest names from the TAMI (technology, advertising, media and information), creative, engineering and corporate arenas.
This shift in the fabric of the business community may be attributed to major investments made by a number of owners to improve and reposition their office properties to meet the demands of this new type of tenant. Owners are virtually creating new tenant experiences in their buildings, with office space boasting technological efficiencies and tenant amenities designed to support a balance between professional and personal needs.
The “if you build, he will come,” quote made famous in the movie Field of Dreams is certainly apropos when looking at the trend of newly renovated properties attracting some of the best tenants in the market. A perfect example is the success at Merritt 7, a six-building, 1.4 million-square-foot office complex that recently completed more than 600,000 square feet of new leases — including a recent 133,000-square-foot lease by Datto Inc., one of the fastest- growing information technology firms in the world for its global headquarters — following the completion of a capital improvements campaign undertaken by Clarion Partners in a strategic venture with Marcus Partners.
The upgrades at Merritt 7 included new elevator cabs; integration of state-of-the-art fitness facility with updated locker rooms; upgraded cafeterias with seating and serving areas with new kitchen equipment; several Starbucks Cafés; new lobby atriums with interior seating areas and sophisticated finishes; and a new security command center. In addition, the corporate park has been widely recognized for its energy conservation efforts, which are also of paramount importance for today’s new type of tenant. This includes LEED EB certification by the U.S. Green Building Council (USGBC) for buildings 101, 301, 401, 501 and 601 and the Environmental Protection Agency’s ENERGY STAR rating.
Another example is 800 Connecticut Avenue, an office building that caters to TAMI tenants and millennial employees. The 412,000-square-foot trophy property owned by CBRE Strategic Partners U.S. Value 7, a fund sponsored by CBRE Global Investors, is on the receiving end of a significant capital improvements program offering conference/collaboration center accommodating more than 100 people; an upgraded on-site café; outdoor green spaces; a new atrium lobby and lounge seating; enhanced on-site tenant amenities; and full Wi-Fi connectivity.
The capital improvements have been well received by the market. As a result, OMEGA Engineering, a global instrumentation company headquartered in Connecticut, just inked a 26,995-square-foot office lease at the property that also boasts Priceline.com and Octagon as tenants.
50 Washington Street (SoNo 50), which was acquired in 2014 by Norwalk-based Capital Equities Group, is nearing completion of a multi-million dollar investment that includes a grand new lobby nearly double in size with exposed beams, columns and ductwork; redesigned loft-like interiors; and a state-of-the-art fitness center, conference facility and game room/lounge. The exteriors of the boutique tower are also receiving upgrades that reflect the historic nature of the neighborhood with a modern touch. Steel glass canopies, new storefronts, and lighting are among the renovations nearing completion.
As a result, SoNo 50 has become one of the most sought-after business addresses in the area. Most recently, the ownership signed the first major lease at the property — even before all capital improvements were completed — with Inspira Marketing Group, an experiential marketing agency specializing in reaching consumers, fostering meaningful connections and propelling brands forward. The agency committed to a 13,650-square-foot, long-term lease and will relocate its Norwalk offices, currently located at 16-18 Ann Street, to the first and second floors of SoNo 50.
The higher rental and occupancy rates at properties that have been renovated and repositioned speak volumes in today’s highly competitive real estate market. Given the lack of new office construction, owners of office properties are addressing energy, technology and parking needs of today’s tenants to create premier 21st century office complexes and are reaping the benefits.
— By Thomas Pajolek, Executive Vice President, CBRE Group. This article originally appeared in the June/July 2016 issue of Northeast Real Estate Business magazine. For subscription information, visit www.FranceMediaInc.com/publications.