NORWALK, Conn. – An updated report examining the state of the Class A office market in Norwalk was submitted by CBRE Group, a commercial real estate market analyst hired by the city of Norwalk, to The Joint Committee studying the proposed “95/7” project.
The Joint Committee is a combination of Norwalk Planning Commission, Common Council Planning Committee and Norwalk Redevelopment Agency members. CBRE Group’s report concludes existing market conditions do not justify construction of new office space.
The report examines several factors, including new construction costs, financing, delivery time, vacant inventory, Merritt 7 Corporate Park and area competition. Norwalk's Class A office space rents for an average of $32 per square foot; Stamford commands slightly higher rents of $38 per square foot; while Greenwich commands significantly higher rents at $71 per square foot.
CBRE Group’s report states today's new construction costs require rents in the high $40s to mid $60s and involve a waiting period. The analysis of the commercial office market in the greater Norwalk area was requested as the The Joint Committee considers a proposed change to the Land Disposition Agreement for the 95/7 parcel.
The parcel consists of 12 acres at the intersection of Interstate 95 and Route 7, adjacent to the Greenfield Partners headquarters.
The site currently is could hold 1.1 million square feet of mixed-use development, with 600,000 square feet dedicated to office use. Norwalk Class A space's current vacancy rate is currently 16.3 percent, with 734,000 square feet of inventory vacant. So General Growth Properties believes the development of a mixed-use project including office space is not viable in the near or intermediate-term. The company remains confident the best way to use the site is a mix of retail, hotel and public uses.
Though primarily a high-end retail fashion center, the proposed project includes public plazas, education space, public common areas, restaurants and a select service luxury boutique hotel. It's estimated the project will create nearly 2,600 ongoing jobs – 2,285 of which will be in Norwalk – at an average salary of $41,700. Located within an Enterprise Zone, the center is projected to generate $5 million in annual city tax revenue and more than $5 million in city permit fees.
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