As interest rises, so does the cost of office space in Westport

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WESTPORT – With a downtown office building selling for well above its estimate, the Darien developer who owned it put their other two Westport offices up for sale.

Both offices at 355 Riverside Ave. and 285 Riverside overlook the scenic Saugatuck River between downtown Westport and Interstate 95. Covering over 50,000 square feet, the brick building is at 285 Riverside Ave. the third largest listed building in Southwest Connecticut for sale on the Loopnet commercial real estate website, after an office campus in Milford and an office building in Stamford.

The Westport buildings are owned and managed by Baywater Properties and are split for multiple commercial tenants. The smaller building on Riverside Ave. 355 was once used as a back office operation by Bridgewater Associates, the world’s largest hedge fund, headquartered a few miles north.

Baywater has announced the prices it is looking for for the Westport buildings in online offers via the commercial real estate broker CBRE.

A Baywater office at 450 Post Road E. was recently sold for $ 15 million, 60 percent more than the City of Westport’s last valuation in 2020. The building is rented to Wells Fargo Advisors, adjacent to a Wells Fargo bank branch and a market from Trader Joe.

Baywater is preparing to redevelop the Corbin District in downtown Darien, which will replace nearly a dozen buildings with a new village center with retail, apartments and boutique offices.

The demand for office space remains a guessing game for many as companies maintain remote working arrangements that have proven effective for many since the beginning of the COVID-19 pandemic.

In the third quarter, according to the Stamford office of Cushman & Wakefield, more than 12 million square feet of office space was available for rent in Fairfield County, representing a vacancy rate of 32 percent. This contrasted with a vacancy rate of less than 27 percent two years earlier.

But buyers continue to rely either on a comeback in office letting or on the possibility of conversion. In August, the former Conde Nast building on East Putnam Avenue in Greenwich sold for $ 63.5 million, which equates to $ 340 square feet.

On paper, office rental rates in Westport are only 1.3 percent lower than two years ago average as calculated by Cushman & Wakefield, but commercial property owners offer perks like a few months of free rent at the beginning of a lease.

This has created opportunities for renters that may have been taken off the market before 2020 to give Westport a new look, according to David Waldman, director of David Adam Realty. The city had a large influx of new residents during the COVID-19 pandemic, which caused a revitalization.

“It allowed other people to come in and occupy space,” Waldman said. “The city just lives.”

Alex. [email protected]; 203-842-2545; @casoulman


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