Fairfield County’s small 8.75-million-square-foot community-neighborhood shopping center market was somewhat stagnant in the second quarter of 2012, as low vacancy and a lack of new supply stifled demand. Net absorption was zero during the quarter, keeping the vacancy rate at 4.1%, which was down 40 basis points from a year earlier. In July, 15,000 square feet of net absorption pushed the rate down to just 3.9%. The total was 44,000 square feet of net absorption for 2012 through that month, about the same as the forecast for the year. The previous two years had seen about 80,000 square feet.
The 46,000-square-foot neighborhood center at 41-51 Monroe Turnpike in Trumbull is the only community-neighborhood center under construction. It broke ground in May for completion next April. Reis predicts the vacancy rate will remain at 3.9% or close to it for several years, as limited new supply accommodates just limited net demand.
Community-neighborhood center rents edged up in the second quarter, as both the average asking rent and the average effective rent increased 0.3%, to $27.91 psf and $25.25 psf, respectively. Decreases in July gave back most of that increase and gains of just 0.8% asking and 1.2% effective are forecast for all of 2012. Subsequent annual increases are expected to be only moderately larger, despite low vacancy.
The resumption of housing production, meanwhile, might lead to a restart of the mixed-use and urban redevelopment retail construction that was common in the mid-2000s. Two major projects, Steelpointe Harbor in Bridgeport and Norwalk Town Center, are planned. A smaller project, the 15,000-square-foot retail component of the Church Lane project, completed construction in March in Westport.