For the urbanites who fled New York for Connecticut — and saw their stays extended by remote work — returning to the office might not mean returning to the city.
In Greenwich, office demand has popped, lifting rents and spurring bidding wars for choice spaces, brokers told Bloomberg News, as financial firms react to the demand for suburban housing and attempt to meet employees where they are.
A long-time hedge fund haven, Greenwich is now leasing satellite offices to asset managers and private equity firms. Elliott Management and Apollo Global Management are among those that have expanded to the area or plan to.
Office leasing in the town’s central business district surged 312 percent in the first quarter, compared to the fourth quarter of last year, to 120,000 square feet — nearly triple the five-year quarterly average, according to CBRE data reported by Bloomberg.
“We believe in the next few months there will be very little opportunity left to lease spaces in the central business district of Greenwich,” said David Block, an executive vice president at brokerage CBRE Group in Stamford.
In Manhattan, by comparison, lease deals stalled at less than half of pre-pandemic levels.
Greenwich office rents are up too, rising 3 percent in the first quarter, year-over-year, to $92 a square foot, CBRE found. That’s $10 more than Midtown Manhattan is asking.
Manhattan-based companies are leading the growth in Greenwich, with 54 percent of newly leased space going to New York groups such as Redbird Capital Partners, founded by former Goldman Sachs partner Gerry Cardinale, and fintech platform iCapital Network, Bloomberg reported.
In terms of size, Greenwich’s market pales in comparison to New York’s. The Connecticut town’s central business district offers about 2 million in office space, approximately the same size as Goldman Sachs’s lower Manhattan headquarters.
So supply in Greenwich is tight. The vacancy rate in that main business strip is hovering around 11 percent. And considering pending deals, that rate should drop to “almost zero vacancy in downtown Greenwich” by year’s end, James Ritman, executive vice president at Newmark, told Bloomberg.
[Bloomberg] — Suzannah Cavanaugh