The Objective <ul><li>To provide insight to this market’s direction over the next 7 – 10 years </li></ul><ul><li>Identify ...
Definitions <ul><li>Large Floor Plate User – Corp. tenants over 20,000 SF in market </li></ul><ul><ul><li>Public </li></ul...
How <ul><li>Brief history – How we got here </li></ul><ul><li>Job Growth </li></ul><ul><li>Pipeline </li></ul><ul><li>Driv...
Fairfield County- Historically Square Footage Additions
Fairfield County- Historically <ul><li>Vacancy Rates </li></ul>
Fairfield County- Today <ul><li>Vacancy Rates </li></ul>= 1,211,532  SF = 781,788  SF = 436,675  SF
Overall Real Estate Fundamentals <ul><li>Positive for Most Forms of Real Estate </li></ul><ul><li>Economy Showing Signs of...
Periodic County Employment Growth 9,000 Jobs 4,000 Jobs 4,000 Jobs
Fairfield County Pipeline <ul><li>Approximately 5.3 million square feet of office space have a reasonable expectation of c...
Fairfield County Pipeline Total = 5.3 million SF.
Review The Facts <ul><li>History of how we got here </li></ul><ul><li>Job projections through 2010 </li></ul><ul><li>Pipel...
The Soft Facts - Change <ul><li>Economic Base Change </li></ul><ul><li>Manufacturing base to an Information base </li></ul...
Forecasted County Vacancy Rates Vacancy Rates with no space additions to the market
Forecasted County Vacancy Rates Now add the proposed space additions in: Norwalk, Fairfield & Stamford
Forecasted County Vacancy Rates Now add the proposed space additions in: All of Fairfield County
Challenges <ul><ul><li>Be Aware of What is Happening Next Door </li></ul></ul><ul><ul><li>Establish Market Controls? </li>...
Opportunities <ul><ul><li>In All Change Comes Opportunities </li></ul></ul><ul><ul><li>Follow the herd - Continued Eastwar...
Opportunity 101 Office Market Segmentation Large Floor Plate User vs. Small Floor Plate User
Fairfield Vacancy Rates By Available Contiguous SF
Stamford Vacancy Rates By Available Contiguous SF
I-287 Corridor Vacancy Rates, Large vs. Small Floor Plate Users 32 Buildings 39 Buildings
Fairfield County Overall Vacancy Rates  272 Buildings 867 Buildings
Conclusion <ul><li>Capitalize on Fairfield County’s Strengths </li></ul><ul><li>Building the office produce for Today’s ma...
<ul><li>www.AustinMcGuire.com </li></ul><ul><li>December 1, 2004 </li></ul>
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A Long Range View of the Fairfield County Office Market

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  • Doc on plane Our presentation today… follow up to the work we did last year Last year we summarized some of the structural challenges for this market, this year we refine that view and discuss the opportunities. Appraiser reflects the market – this is based on talking with you – the marketplace.
  • Slide 2 – Objective   Why,   Historically, explosive growth outpaced projections (double check) - can that happen again? Because a number of factors impact this ability for dynamic growth in the next decade, these include Structural imbalance Change in the Way Business is done – ADAM … BIG 8 ACCOUNTING…..THIS PRESENTATION 3.However, in those constraints lies opportunities for success.
  • &gt;&gt;&gt;&gt;&gt;&gt; = Before we can discuss the future we need to understand the past Next Chart
  •    
  • Slide 5 – Historical square foot additions   The 1980 view Dynamic growth of the 1980 with 25 million sf 1990 with 9 million Bulk of space in large floor plate users (20 million sf in 1980, 8+ million in 1990’s KEY POINT – this is were the majority of the vacancy rate resides          Example, floor plats of less then 25K sf historical vacancy at 10% even today.
  • Slide 7 – Historical vacancy rates   RBA’s Range from 55.9 mil to 60.3 mil Key here – 57 million sf of office space and a 94% occupancy rate in 3 rd Q 1999 Can this happen again (I.e. a health office market) looking out of the next decade and beyond? …. Yes and no…… a host of new issues and different challenges face this market. Closer look at today
  • Slide 8 – So where are we today?   Geographic breakdown of space Need to absorb 2.5 million SF to achieve equilibrium
  • Slide 14 – Jobs by category graph   Health and education is the big winner 9K Financial Services / Professional Services 4 K each Overall number of jobs by 2010 = 27,650 Equates to 5.5 to 7 million SF of office demand
  • Slide –15 Pipeline   5.3 million SF of planned new space Based on a survey of municipalities          Proposed          Planning          Approved          In process
  • History – alot of class A large floor plate space Jobs – slow and located in the small business sector (those small floor plate users) Pipeline – catering to the big floorplate users. Designed for yesterdays market? Why do I say that - NEXT SLIDE
  • Manufacturing based economy of the 1980’s needs large corporations with large staffs ………….Computers/Web harness the creative and entrepreneurial strength of America Dot Com boom …………DOCTOR and ADAM Globe trotting the industrial market’s from comforts of a connected office. 80’s hangover of building that don’t fit today’s needs…… Saved by the dot com boom. Economy on a tear Not sure where its going … everyone needs space…. Lots of space…. Result 94% occupancy prior to the dot com bust……….Dot com bust revealed the structural problems that were there in the early 1990’s The information based economy does not need huge office complexes to house huge staffs – FASTER, QUICKER, CHEAPER – means it does not matter where you are, only that you can get the job done right at the lowest price. Name – Globalization whether its around the corner or across the globe. Slow job growth – Why - because the US economy moved into the world-wide executive suite as the leader in the information economy – and there is not a lot of room for executives.
  • Lets bring this all together. What does it mean for Fairfield County? DISCRIBE THE CHART Add jobs but no new space
  • Slide 19 - Challenges Danbury Mayor – market controls Westchester vs. Fairfield/ 12.4 vs. 15.4 Greenwich doing well – 90 percent there …. 9.9 vacancy rate if 2 bldgs removed
  • &gt;&gt;&gt;&gt; Deeper Cut &gt;&gt; Next Page
  • This Graph represents all Class A&amp;B office buildings with RBA’s greater than 40,000 Sqft, each line is broken down by contiguous blocks of space.
  • Strengths – Educated workforce, new information based companies start and grow educated areas. (Converse – mature companies move away to lower cost areas once their “process” has been established. Entrepreneurial environment Excellent infrastructure Quality of Life – people want to be here Build for today – flexible and adaptable buildings – floor plats that can accommodate large and small users (read not to deep). Conversion Not all at once, slow process so as not to overflow the lower end Municipal Understanding DANBURY MAYOR - We’re all connected need to help each other out. Casino’s vs. Reed Putnam – Designed in the 1980’s (4,000 more commuters for RP) the I-95 nightmare Municipal Responsibility to think not just about today but tomorrow. What we build today will likely remain for our lifetimes.
  • A Long Range View of the Fairfield County Office Market

    1. 2. The Objective <ul><li>To provide insight to this market’s direction over the next 7 – 10 years </li></ul><ul><li>Identify the risks and opportunities </li></ul><ul><li>Through Market Segmentation </li></ul><ul><li>Reflect the Changing Way Business Is Done </li></ul>
    2. 3. Definitions <ul><li>Large Floor Plate User – Corp. tenants over 20,000 SF in market </li></ul><ul><ul><li>Public </li></ul></ul><ul><ul><li>Global Players </li></ul></ul><ul><ul><li>Space needs decision not made here </li></ul></ul><ul><li>Small Floor Plate User < 5,000 SF </li></ul><ul><ul><li>Private Companies </li></ul></ul><ul><ul><li>Connected </li></ul></ul><ul><ul><li>Professional </li></ul></ul><ul><ul><li>Service Oriented </li></ul></ul><ul><ul><li>Owner Lives Here </li></ul></ul><ul><li>Survey Parameters: Class A & B Office with GBA > 20,000 SF </li></ul>
    3. 4. How <ul><li>Brief history – How we got here </li></ul><ul><li>Job Growth </li></ul><ul><li>Pipeline </li></ul><ul><li>Drivers of Significant Change </li></ul><ul><li>What Could Happen </li></ul><ul><li>Opportunities </li></ul>
    4. 5. Fairfield County- Historically Square Footage Additions
    5. 6. Fairfield County- Historically <ul><li>Vacancy Rates </li></ul>
    6. 7. Fairfield County- Today <ul><li>Vacancy Rates </li></ul>= 1,211,532 SF = 781,788 SF = 436,675 SF
    7. 8. Overall Real Estate Fundamentals <ul><li>Positive for Most Forms of Real Estate </li></ul><ul><li>Economy Showing Signs of Sustained Growth </li></ul><ul><li>Corporate Profits and Household Incomes Continue to Improve </li></ul><ul><li>Ample Debt Capital Available </li></ul>
    8. 9. Periodic County Employment Growth 9,000 Jobs 4,000 Jobs 4,000 Jobs
    9. 10. Fairfield County Pipeline <ul><li>Approximately 5.3 million square feet of office space have a reasonable expectation of coming online over the next 7 years. </li></ul>
    10. 11. Fairfield County Pipeline Total = 5.3 million SF.
    11. 12. Review The Facts <ul><li>History of how we got here </li></ul><ul><li>Job projections through 2010 </li></ul><ul><li>Pipeline </li></ul>
    12. 13. The Soft Facts - Change <ul><li>Economic Base Change </li></ul><ul><li>Manufacturing base to an Information base </li></ul><ul><li>Computers - Faster, Quicker, Cheaper </li></ul><ul><li>Structural Imbalance in the Office Market </li></ul><ul><li>Globalization = Increase in small companies locally </li></ul><ul><li>Slow job growth </li></ul>
    13. 14. Forecasted County Vacancy Rates Vacancy Rates with no space additions to the market
    14. 15. Forecasted County Vacancy Rates Now add the proposed space additions in: Norwalk, Fairfield & Stamford
    15. 16. Forecasted County Vacancy Rates Now add the proposed space additions in: All of Fairfield County
    16. 17. Challenges <ul><ul><li>Be Aware of What is Happening Next Door </li></ul></ul><ul><ul><li>Establish Market Controls? </li></ul></ul><ul><ul><li>Risk of Overextended Infrastructure </li></ul></ul>
    17. 18. Opportunities <ul><ul><li>In All Change Comes Opportunities </li></ul></ul><ul><ul><li>Follow the herd - Continued Eastward Movement </li></ul></ul><ul><ul><li>Ride the Wave - Flexible offices catering to both the larger and smaller office user </li></ul></ul><ul><ul><li>Long Term - Emerging Outer beltway Around Manhattan Rt 8 to I-84 to I-87 to I-287 </li></ul></ul>
    18. 19. Opportunity 101 Office Market Segmentation Large Floor Plate User vs. Small Floor Plate User
    19. 20. Fairfield Vacancy Rates By Available Contiguous SF
    20. 21. Stamford Vacancy Rates By Available Contiguous SF
    21. 22. I-287 Corridor Vacancy Rates, Large vs. Small Floor Plate Users 32 Buildings 39 Buildings
    22. 23. Fairfield County Overall Vacancy Rates 272 Buildings 867 Buildings
    23. 24. Conclusion <ul><li>Capitalize on Fairfield County’s Strengths </li></ul><ul><li>Building the office produce for Today’s market </li></ul><ul><li>Conversion of Large Floor Plates to Small in a structured format </li></ul><ul><li>Municipal Understanding </li></ul>
    24. 25. <ul><li>www.AustinMcGuire.com </li></ul><ul><li>December 1, 2004 </li></ul>

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