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n e w h a v e n b i z . c o m | M a y 2 0 2 2 | n e w h a v e n B I Z 21 the event of another lockdown, or early termination clauses for longer- term leases. Similar challenges to entice tenants exist for New Haven's central business district office property owners, said David Hansen, a New Haven-based office broker with CBRE. "For longer-term deals of five to 10 years, landlords are contributing capital to [amend spaces] to fit those clients' needs," he said. More vacant space Hansen said he has been encouraged by interest and activity he's seen around office space over the past year, even as some clients grapple with their spacing needs. Over the past year, he's leased about 130,000 square feet of space in downtown New Haven, about half office and half lab space. In part, those moves were motivated by the opportunity to relocate to a building with better amenities. Despite the uptick in office activity, Hansen said, tenant demand in the city's downtown is still not where it should be. According to Colliers New Haven market data, the vacancy rate for New Haven Class A office space was 21.8% at the end of the fourth quarter of 2021, but Class A office space in the central business district was better at 14.1%. By contrast, New Haven's neighbor to the south, Stamford, saw office leases increase overall by 23 percent in 2021, with more than 1.7 million square feet of new office space leased, according to CBRE figures. By comparison, said Chris Ostop, manager director of commercial brokerage firm JLL, New Haven has a much smaller office inventory than Stamford and is much less dependent on major corporate tenants. "ere's only [a handful] of Class A office buildings in New Haven, including three in downtown and two on Long Wharf," he said. Largely, he said those buildings are home to smaller regional or local financial services, legal and accounting firms that may be less likely than corporations to transition to hybrid models. By comparison, according to CBRE survey data, more than 87 percent of large companies nationally plan to use a hybrid model. Looking ahead, Ostop said life sciences will drive New Haven's future and its office market. According to a Colliers fourth quarter report, nearly 25 percent of the office and lab space was leased by life sciences companies. And with rates for lab space approaching $40 per square foot — significantly higher than the low-to-mid $20-per-square- foot range for office space — more property owners are reconfiguring their properties to meet market demand. e recently converted office space at 55 Church Street — now known as the Elm City Bioscience Center — offers more than 37,000 square feet of leasable space, with two startup life sciences companies inking lease agreements last year. Similarly, the former Higher One headquarters building at 115 Munson Street has been converted to Winchester Works, an office and lab space. Ostop points to Yale's new Center for Cooperative Research to enhance collaborations with partners in the community and industry as signs of the future. Yale — and the startups it spins out — is only going to grow, he said. Kristin Geenty agrees. "e biggest opportunity and challenge for the office market in New Haven is adaptive reuse," she said. "Whether that's biotech or something more flexible for an office working model." n Space at 55 Church St., New Haven is now home to the Elm City Bioscience Center. PHOTO | COSTAR Chris Ostop Member FDIC Equal Housing Lender Over 165 Years Suppor ting Local Businesses Local businesses are more than just accounts. They're what make our communities great places to live. And at Newtown Savings Bank, we have what it takes to help your business grow. We're neighbors helping neighbors— that's the Power of Local. See how we can help your business: Visit NSBonline.com or contact Mark Candido at 203.364.2987. Paige & Ted Vibrant Health NSB_Community_Banking_10x6.75_0322.indd 1 NSB_Community_Banking_10x6.75_0322.indd 1 3/28/22 1:43 PM 3/28/22 1:43 PM

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