Hartford Business Journal

8 HARTFORDBUSINESS.COM | MAY 4, 2026 Deal Watch CBRE Executive Vice President Tom Pajolek sits in his Stamford office with views of downtown behind him. HBJ Photo | Michael Juliano Apartment conversions cut Fairfield County office supply, driving vacancy down despite weak demand Top-tier markets Leasing that is occurring is increas- ingly concentrated in Fairfield County's most desirable locations, brokers say. Stamford and Greenwich central busi- ness districts accounted for about 77% of leasing activity in the first quarter, according to CBRE, as tenants continue a "flight to quality" toward newer, amen- ity-rich buildings near transit and urban centers, including New York City. "If your building isn't up to date, it's very difficult to get into a discussion with a prospective tenant, because they're looking to create high-end experiences for their tenants or for their employees," Pajolek said. Some landlords are responding with upgrades. For example, Greenwich-based real estate development and investment firm HB Nitkin plans to renovate the 280,000-square-foot Metro Center office building in Stamford after acquiring it earlier this year for $64 million. Several companies, including law firm Robinson+Cole, Roth Capital and software firm Finario, have recently signed leases in the building. CBRE identified several notable lease deals during the first quarter, most of them in Stamford. Primo Brands signed a 45,000-square- foot lease at 3001 Stamford Square as it relocates from another local office complex. Other activity included lease renewals by Deutsch Family Wine & Spirits and Hexcel at 201 Tresser Blvd., and Edgewell Personal Care in Shelton. Conversion craze Even with that activity, however, the biggest force shaping the market is the ongoing removal of office space from inventory. About 1 million square feet of office space was taken out of the market in the first quarter as nine buildings were earmarked primarily for residential conversion, according to Pajolek. Since 2021, roughly 4 million square feet has been removed from Fairfield County's office market, reducing total county- wide inventory to about 37 million square feet, he said. JLL reported similar trends, estimating that 1.39 million square feet was pulled from the office market in the first quarter through seven conversion projects. Among the largest is a plan by New York-based developer Saber-Hightower to convert two office buildings in Norwalk's Merritt 7 complex into 300 apartments. The project, approved earlier this year, will remove more than 500,000 square feet of office space. In Stamford, developers are also moving forward with plans to convert a 302,000-square-foot former Gen Re office building into 196 apartments. Brokers say more conversions are likely. Cahill estimates that an additional 2 million square feet could be removed from the market, which would push vacancy rates closer to 15% — a level generally considered more healthy. "The office space that will survive is the office space that is closer to the transportation hubs that have amenities and are in the smaller downtowns," Cahill said. "If you're in a suburban office park, your days are numbered at this point." Metro Center in Stamford, a 280,000-square-foot office building being renovated by HB Nitkin after a $64 million purchase. Photo | CoStar By Michael Juliano mjuliano@hartfordbusiness.com F airfield County's office market is tightening — just not in the way landlords might hope. Vacancy rates are declining, but largely due to office buildings being taken off the market and converted to apartments — not a rebound in demand for workspace, according to industry data and experts. The county's office vacancy rate fell roughly 3 percentage points to about 23.4% in the first quarter of 2025, according to data from commercial real estate broker JLL, with CBRE pegging it slightly higher at 23.9%. Brokers say the decline is being driven by a shrinking supply of office space. In fact, demand remains under pres- sure as many companies continue to reduce their footprints. Fairfield County recorded negative net absorption of 71,280 square feet in the first quarter — meaning tenants gave back more space than they leased — marking the first quarterly decline in occupied space in seven quarters, according to CBRE. Leasing activity totaled about 367,000 square feet, up from the prior quarter but still below historical norms. CBRE Executive Vice President Tom Pajolek attributed the softer demand largely to hybrid work patterns, which have led companies to resize their office needs based on how often employees are actually on-site. He cited one law firm with 20 employees that typically has only four workers in the office at a time. "There's still a recognition that people don't come to the office every day," Pajolek said. "Footprints are being right-sized based on current usage." Broader economic uncertainty, including concerns about tariffs and the potential impact of artificial intelligence on the workforce, is also weighing on decision-making, he said. Other brokers describe a market that has stabilized but not meaningfully rebounded. Sean Cahill, a principal and managing director at Avison Young, said leasing activity is being driven largely by renewals, with many companies opting to stay in place rather than expand or relocate. FAIRFIELD COUNTY OFFICE MARKET 1Q 2026 INVENTORY 37.25M SQ. FT. VACANCY RATE 24% NET ABSORPTION* -71,208 SQ. FT. TOTAL LEASING ACTIVITY 367,000 SQ. FT. AVG. ASKING RENT (PER SQ. FT.) $36.19 * Net absorption is the amount of space that was leased in the first quarter of 2026 minus the amount of space that has been vacated. | Source: CBRE Sean Cahill

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