New Haven-Fairfield County Office Market Report

Flight-to-quality less apparent in southwestern Connecticut. Following the exit of certain high-profile tenants from the market, Class A space faced waning demand even prior to the health crisis, with segment vacancy exceeding 25 percent as early as 2019. The collapse of Silicon Valley Bank could further impact Class A leasing around Downtown New Haven, as the institution was a substantial source of funding for area biotech startups. Smaller local firms remain the backbone of leasing demand, exemplified by mid- and lower-tier office performance. Since 2021, Class B and C vacancy has hovered in the mid-10 percent zone, its lowest range since prior to the financial crisis. Owners of Class A facilities could, however, increase concessions usage to coax smaller companies into amenity-rich spaces, and may be supported in these efforts by low construction activity.