Four summers back, some doubted the multifamily development boom sweeping Fairfield County, Connecticut, would draw enough renters.
Then last year Covid prompted urbanites to plunder exurban home markets, demand trickled over into rentals and the leasing markets of southwest Connecticut got hot. And they have stayed that way even as New York City has reopened and many returned.
PGIM Real Estate is the latest to cash in on the demand. The global investor offloaded Parc Grove Apartments, a 402-unit amenitized rental complex in the heart of downtown Stamford, for $154 million this week in a deal brokered by CBRE. The site last sold in 1994 according to city records.
The buyer was multifamily investor Pacific Urban Residential. Based in Palo Alto, California, the firm picked up the 200 Broad Street development for 23 percent more than the $125.5 million appraised value recorded by the city in 2020.
The sale speaks to the lasting appeal of area rentals amid the Connecticut real estate crush.
The Stamford-Bridgeport-Norwalk metro area saw a 72 percent uptick in transplants from New York City in 2020, CBRE data analyzed by Hearst Connecticut Media found, a migration that spiked area rents.
From March 2020 through March 2021, average leases for an apartment in Fairfield County jumped 44 percent; in the same period, available rental units slumped by 45 percent, the CTPost reported in April.
Diminishing supply has squeezed a market considered tight even before the pandemic. Downtown Stamford boasted a 94.5 percent occupancy rate in 2019 according to city property records reported by Stamford Advocate.
Rental demand has flowed over into next-door Greenwich, a town that lost most of its rental appeal in the 1980s, local broker Mark Pruner said.
From the start of the pandemic through 2021, the town has seen ongoing demand for long-term rentals as empty-nesters sell into a hot market, then need a place to live, and as families rent to give the area a try before they buy.
The Mill, a new 59-unit luxury rental complex, expects to be 100% leased before move-ins start this summer, as ownership makes its way through a list of 1,000 inquiries. The building now has 10 units left.