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Unfulfilled Promise
State's commercial real-estate market doesn't benefit from Sept. 11
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Business New Haven
12/10/2001
By: BNH
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Three months ago, companies displaced from lower Manhattan by the September 11 terrorist attacks descended upon Fairfield County in search of available offices space, spurring hopes of a commercial real-estate boon that might extend even into New Haven County.
Those hopes appear to have been misplaced.
According to commercial real-estate professionals, a majority of firms chose to ink deals in midtown Manhattan and New Jersey instead of Connecticut, in part because of the availability of large blocks of prime, Class A space with open floor plans and broadband wiring.
Certainly, the lure of more attractive rental rates outside of Manhattan was a positive selling point for Connecticut. According to published reports, as of October 30, Class A office space in Fairfield County averaged $30.75 per square foot, compared with $44.04 per square foot in the lower Manhattan financial district.
And some companies responded. Connecticut has had several large tenants enter the market, including American Express, which leased 175,000 square feet in Stamford, while Citigroup leased an additional 150,000 square feet, according to the commercial real-estate firm of CB Richard Ellis.
One factor in the decision of a number of firms to remain in New York was a softening of demand for commercial real estate in Manhattan in a slowed economy. Another appears to be employee location: The number of workers who lived in the city or in nearby New Jersey outpaced those who commuted in from Fairfield and Westchester (N.Y.) counties.
Transportation has also emerged as a major issue for companies, says Michael Siegal of Insignia ESG in Stamford, who points out that the average train commute from Fairfield County is three times more costly that a bus ride from, for example, Jersey City.
According to Cuchman & Wakefield, companies looking to Fairfield County will find seven blocks of space totaling 100,000 square feet of space or more. Three of those parcels have a total of nearly 260,000 square feet of Class A space.
But until the estimated 35 million square feet of Manhattan office space - up from 32 million feet before the attacks, due in part to companies unloading space they didn't need in a softer economy - is spoken for, Connecticut make remain a spurned suitor.
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