The New Haven office market maintained low vacancy rates during the second quarter of 2010.
Overall vacancy grew from 10.7 to 11 percent. Class A vacancy shrank from 9.6 to 8.8 percent, while Class B availability rose from 11.4 percent to 12.4 percent, according to the second-quarter 2010 New Haven Market Report compiled by Colliers Dow & Condon’s John Keogh.
“There was a minor uptick in the vacancy rate but I don’t think it’s indicative of any trend,” says Keogh, who tracks 53 office properties. “I think the long-term trend is toward lower vacancy space in New Haven.”
Keogh’s report shows an 8.6 percent Class A vacancy rate in the central business district, with 1,233,265 square feet (including 99,721 direct space and 6,550 sublet) available.
Cushman & Wakefield’s New Haven office report for the second quarter listed Class A vacancy rate in New Haven’s central business district at 8.9 percent, with 1,089,046 square feet available. Overall vacancy is stable year over year, the
report asserts, with vacancy up just half a percent from 13.2 percent in 2009 to 13.7 percent the current quarter.
“New Haven continues to buck the trend,” explains Cushman & Wakefield Senior Director Robert Motley. “The good news is there is no terrible news on the horizon, though not a lot of hiring is going on.”
The C&W report notes that the average asking rent for New Haven County dropped $0.93 per square foot from $21 during the second quarter of 2009 to $20.07 during the second quarter of 2010. Despite the drop, the average asking rent “currently is higher than it was in the years before the recession,” according to Motley, mainly because of the availability of more high-quality Class A space.
There were two significant commercial deals during the second quarter, according to C&W: 1764 Litchfield Turnpike, Woodbridge, a 49,955-square-foot building acquired by Aliquant Corp. for $5,070,000; and a 17,127-square-foot East Haven property at 444 Foxon Road was purchased by WTE Foxon North High LLC for $1,390,000.
The three significant second-quarter leases were at 1 Audubon Street, New Haven, where Meyers, Harrison & Pia rented 13,386 square feet; 55 Church Street, New Haven, where Prometheus Research took 11,270 square feet; and 1501 East Main Street, Meriden, where Integrated Security Group leased 4,092 square feet.
For the remainder of 2010, C&W forecast “slowly improving leasing activity, with stable vacancy rates and asking rental rates.”
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