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Market Report

New Haven-Fairfield County
Office Market Report

2023 Investment Forecast

Tenants Show Preference for Low-Cost Space;
Capital Sources Still Keen on Class B and C Assets

Bifurcated vacancy performance favors discounted leases as metro faces headwinds. Exiting 2022, southwestern Connecticut’s Class B and C offices boasted the lowest availability rates seen in the region in over a decade, contrasting persistently elevated Class A vacancy. The region’s high-end sector reported declining leasing activity throughout 2022 as segment availability remained in excess of 25 percent, a trend unlikely to be aided by a challenged labor market in 2023. A shrinking 20- to 34-year-old local population could frustrate expansion efforts for larger firms seeking to recruit young professionals, weighing on absorption at the higher-tier assets these organizations tend to lease. Given evident demand for the market’s low- and mid-tier space, owners of Class A offices could increase concession packages targeting traditional mid-tier property tenants, including smaller financial and law firms. Yale’s academic base has also fostered a flourishing biotech sector in core New Haven and adjacent zones, many of which could be enticed into high-end space.
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