Cushman & Wakefield’s Stamford, Conn., and Westchester, County, N.Y. offices posted a banner 2013, completing transactions on almost 2 million square feet, including office, retail, medical and industrial space. This was accomplished despite the soft market fundamentals in the office real estate market in both Fairfield and Westchester Counties.
“When you look at annual office leasing activity averages in Fairfield County over five-year periods, there are notable differences,” said Jim Fagan, senior managing director and market leader of Cushman & Wakefield’s Fairfield and Westchester County regions. “Between 2009 and 2013, the average annual leasing was just over 2.2 million square feet. That’s a 27 percent difference when compared with the 3 million square feet leased annually during the five years prior.
“In Westchester County, averages were lower. From 2009 to 2013, 1.2 million square feet was leased, which was a decrease of 33 percent versus the five years prior.”
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According to Cushman & Wakefield’s Research Department, the office real estate market remained challenged in 2013 due to a variety of factors: Weak office-using employment growth prevented the local office real estate sector from a significant recovery. Corporations continued to make their spaces denser, increasing their employee-to-square-foot ratio for space usage, thereby reducing their square footage requirements. Finally, due to shifts in demographics and market recovery, new jobs have been disproportionately located in gateway cities, such as New York, Chicago and San Francisco, creating a vacuum in the suburbs. We believe that this trend will correct itself over the next 24 months.
While new demand in the office real estate sector remained somewhat stagnant in 2013, there was significant demand in the medical/healthcare, retail and multi-family residential real estate sectors. Large hospitals are merging and acquiring smaller practices in order to increase efficiencies and lower costs. Healthcare providers are also looking to expand into under-supplied locations via satellite locations. Locally, Class-B and C office buildings are being re-purposed for medical use and there has been an increase in the construction of medical buildings in order to accommodate new healthcare technology.
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In the retail sector, occupancy rates and pricing in high-street retail locations, such as Greenwich and the White Plains CBD, have steadily increased over the last few years. As a result, asking rental rates for luxury retail locations are expected to experience double-digit percentage growth within the next few years.
Fairfield and Westchester’s population grew by 2.9 percent and 2.0 percent, respectively, between 2010 and 2014, creating strong demand for multi-tenanted housing in a struggling single-family housing market. As a result, 3,570 multi-family units were constructed in Fairfield County and 1,638 multi-family units in Westchester County since 2008.
In 2013, Cushman & Wakefield represented such prominent tenants as: Boehringer Ingelheim Pharmaceuticals, Inc., General Electric, Sikorsky Aircraft, Western Connecticut Health, Gartner, Inc., Yale-New Haven Health, FactSet and Pitney Bowes. On the landlord side, more than a half a million total square feet were leased for notable firms, such as: Tishman Speyer, Rugby Realty, Summit Development/Grossman Companies, The Silverman Group, Lighthouse Realty, Edgewood Capital, Beacon Capital, Cohen Brothers, and TIAA-CREF. On the sale-disposition side, C&W represented Kraft Foods in the $33-million sale of 555 South Broadway in Irvington, N.Y. to Irvington Central Montefiore Medical Center.
CUSHMAN & WAKEFIELD'S TOP 2013 PRODUCERS IN FAIRFIELD AND WESTCHESTER COUNTY OFFICES
Jay Hruska, vice chairman, was again top producer in 2013 with close to 950,000 square feet of transactions in Fairfield and Westchester Counties. Mr. Hruska was either lead or co-broker responsible for the following notable transactions: Boehringer Ingelheim (328,000 square feet), General Electric Corp. (115,000 square feet), Conair (160,000 square feet), Unilever (60,000 square feet), Merrill Lynch (50,000 square feet), and NBC (35,000 square feet).
Mr. Hruska has consistently ranked among the top 25 of Cushman & Wakefield’s top producing brokers globally. In fact, just in 2013, he was either the lead or part of a team responsible for more than 7 million square feet of transactions globally for his clients.
In addition to Mr. Hruska, the Cushman & Wakefield brokers who had banner years were Steve Baker, Matthew Lisk, Gerry Lees, Al Mirin, Adam Klimek, Maureen O’Boyle and Trip Hoffman. Highlights of their 2013 accomplishments are as follows:
Steve Baker, senior director and a member of Cushman & Wakefield’s Global Alternative Investment Services Group, represented such tenants as Ellington Management Group, LLC (26,222 square feet) and M&T Bank (15,437 square feet).
Matthew Lisk, director, was the tenant representative for Benchmark Education (28,132 square feet) and DAC Group’s expansion to 13,000 square feet at the Centre At Purchase.
Al Mirin, executive director and head of Cushman & Wakefield’s Private Capital Group in the Stamford office, represented the owners in the $11 million sale of 180 Post Road, Westport, Conn. He also represented Save the Children in the $12-million sale of 54 Wilton Road, also in Westport, Conn.
In 2013, Adam Klimek, director, negotiated more than 150,000 square feet of leases on behalf of tenants and represented area landlords in more than 150,000 square feet of transactions. The landlords included INVESCO, Edgewood Capital, Faros, Properties, Lexham Private Investors, Elite Development Group and The Silverman Group.
Gerry Lees, senior director, placed Cycling Sports Group, Inc. into 50,977 square feet at i.park Norwalk. Maureen O’Boyle, senior director, was the broker for Quorum Federal Credit Union (21,855 square feet) in its lease at 2500 Westchester Avenue in Purchase, N.Y.
In addition, the team of Gerry Lees and Maureen O’Boyle were responsible for several large-scale real estate projects for healthcare clients, including Memorial Sloan-Kettering’s purchase of the114,000-square-foot 500 Westchester Avenue in Harrison, which will house Memorial Sloan-Kettering’s new $143 million state-of-the-art cancer treatment center. They were also instrumental in the 119,000-square-foot Norwalk Hospital lease at 761 Main Avenue in Norwalk, Conn. to accommodate medical office space for 10 specialty practices and represented the NYS Attorney General (40,000 square feet) and the NYS Department of Tax and Finance (40,000 square feet) in their leases at 44 South Broadway in White Plains, N.Y.
Trip Hoffman, senior director, co-brokered Boehringer Ingelheim’s 328,000-square-foot lease with Jay Hruska and represented the landlord (Stamford Exit 9, LLC) at 1 Blachley Road in Stamford, Conn. in the 20,534-square-foot lease to the Hospital For Special Surgery.
“This level of success in an admittedly soft market speaks volumes about the capabilities of Cushman & Wakefield’s team,” said Mr. Hruska. “Few other brokerage firms in this market can claim the same volume of success.”
About Cushman & Wakefield:
Cushman & Wakefield is the world’s largest privately held commercial real estate services firm. The company advises and represents clients on all aspects of property occupancy and investment, and has established a preeminent position in the world’s major markets, as evidenced by its frequent involvement in many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries, employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management, consulting and appraisal. The firm has nearly $4 billion in assets under management globally. A recognized leader in local and global real estate research, the firm publishes its market information and studies online at www.cushmanwakefield.com/knowledge.
