Writer: Teresa Marziano, Real Estate Salesperson
Executive Summary
FIRST HALF 2025
US economic strength continued into the summer but there is little doubt that headwinds are gathering intensity. Initial tariffs seem to have had only a modest impact on prices. The latest inflation statistics show a slight reversal in declining inflation trends. Tariffs appear to have settled at the top of the expected range and in the next few months, CPI and PPI reports will guide us in determining whether we are facing a resurgence in inflation. A difficult to interpret employment report suggests that job creation and hiring are slowing. Slightly higher unemployment rate signals that supply of labor is beginning to exceed demand and/or the skill set of available labor does not match the qualifications companies are looking for. This economic backdrop is sobering. However, Fairfield’s economy is driven by the service sector which is showing more resilience than manufacturing and trade. Fairfield County, and Connecticut as a whole, have seen positive job growth in 2025, and have recovered all jobs lost during the pandemic.
Fairfield continues to attract investment in real estate and in other areas. Multifamily residential is receiving the most interest within real estate. Health care and specialty manufacturing lead in other areas. Examples of multifamily residential investment are Meadow Gardens, Norwalk, a $47 Million redevelopment project that will have 59 apartments and a community center and Jones Street Investment Partners acquisition of a 182-unit multifamily building in Danbury.
Similarly, other segments of commercial real estate are attracting capital. In the office segment, 200 Elm St/The Link, a Stanford Class A office complex secured $133 Million loan refinance arranged by Newmark, on behalf of A.M. Property Corp. and Northeast Capital Group. Underscoring interest in well-established medical offices, the Fairfield Medical Group building was acquired for $20.5 Million. Yale New Haven Health’s Northeast Medical Group is an anchor tenant in this building. In the tenant activity side, Sky Leasing LLC, an aviation investment manager, recently leased approximately 6000 sf at the old Greenwich Trust building.
Fairfield is also attracting investment in manufacturing which bodes well for employment. During the 1H of 2025, Mega Metal announced that it would set-up a manufacturing facility in the area, creating 135 new jobs. This is the first investment in Fairfield by this South Carolina company.
Greenwich Retail - Sustainable Recovery
The first half of 2025 brought a rebound in retail leasing activity. Demand for retail space exceeded departures. Pricing was attractive and encouraged searches for space that resulted in new leases. As a result, Greenwich retail vacancy is at a multi-year low. Hospitality and specialty product companies continue to search for available retail space in Greenwich.
Fairfield Retail -Takes a Step Back
Despite moderating leasing rates, Fairfield has struggled to recover occupancy. Over the 1H of 2025, retail departures have exceeded demand and occupancy rates declined, albeit from high levels. The number of leasing deals was still healthy, suggesting that new interest in concentrated in smaller stores and departures are coming from large footprint retailers. This is not surprising as a number of large format retailers, with a historical presence in Fairfield, have been either closing stores or going out of business. Examples are Party City, Stop and Shop, Rite Aid and Joann Fabrics.
Greenwich Office – Persistent Strength
The Greenwich office market is among the tightest in the country. Despite the many hurdles that the office market has been facing since the Covid pandemic, Greenwich has maintained vacancies under 12% over the last few years. Pricing moderated in 2024 but has rebounded in 2025. Leasing deals have declined in 2025 as it is more difficult to find suitable space when vacancies are very low.
Executive Summary
FIRST HALF 2025
Vacancy rates remain under 10% as this niche market is heavily exposed to the financial services industry with an emphasis on hedge funds and investment managers.
Fairfield Offices– A Mixed Performance
Overall, Fairfield Offices lost momentum during the first half of 2025. The first three months of the year were particularly challenging with heavy departures. Within Fairfield, some sub-markets such as Greenwich (described earlier in this report) and Stanford are performing ahead of the average. The city of Stamford saw four large deals during the second quarter, three of which were renewals. First County Bank at 3001 Summer St., Morgan Stanley at 4 Landmark Square and Cummings & Lockwood’s three floor renewal at 6 Landmark Square made up a substantial portion of Fairfield County’s second quarter renewal activity.
Fairfield Investment Transactions – A Modest Rebound
Investment transaction activity rebounded in the first half of 2025, driven by large footprint transactions, and helped by multifamily residential sales. Transaction pricing was at the higher end of the historical range. Investment sales have been sluggish across geographies and market segments. Financing costs and debt availability have been a hurdle. Bid-ask spreads between buyers and sellers have been wide. Transactions have been successful when sellers are motivated by imminent re-financing or buyers identify strategically important locations/assets and become less price sensitive.
HOULIHAN LAWRENCE COMMERCIAL TEAM
Interesting commercial real estate investment opportunities will likely become available in the near future given the number of properties that will need to be refinanced in a vastly different interest rate environment. Liquidity is restrictive and poorly capitalized owners will seek to sell. However, there are numerous market and economic risks that will add to the complexities of acquiring commercial real estate. Understanding the market forces that are shaping the fundamentals for each property requires a deep knowledge of the property, local and regional insights, and close contacts with the right financial partners. Our Team is highly skilled in all these areas.
Reach out to HOULIHAN LAWRENCE COMMERCIAL for a complementary assessment of your real estate, an evaluation of a purchase target, and to receive an in-depth perspective on the dynamic Westchester commercial real estate market.
Fairfield Unemployment below prePandemic Levels
Unemployment Rate in Fairfield County, CT
Office Space – Greenwich Remains Strong but Fairfield Weakens
Greenwich Office Market remains one of the strongest in the Country continues to perform well.
Fairfield Office Market continue to face challenges, losing momentum in the first Half of 2025.
Sources: COSTAR, US Bureau of Labor Statistics, Data Reflects Fundamentals for Fairfield County and Greenwich office markets – August 2025
Retail Improves in Greenwich but Faces Headwinds in Fairfield
Greenwich retail real estate has continued to reduce vacancy but leasing rates have declined to entice tenants.
The larger Fairfield markets are experiencing large tenant departures and weakening leasing rates.
Sources: COSTAR, US Bureau of Labor Statistics, Data Reflects Fundamentals for Fairfield County and Greenwich office markets – August 2025
Investment Activity Modestly Rebounds in Fairfield County
SOME REBOUND IN TRANSACTIONS
Sources: COSTAR, US Bureau of Labor Statistics, Data Reflects Fundamentals for Fairfield County and Greenwich office markets – August 2025