Milford adapting to changing office landscape

MILFORD — It was in 2017 when Julie Nash and her team at the city’s economic and community development department started seeing an expansion in vacant office space.

The office vacancy trend started before the pandemic, and according to Nash, when the country went into lockdown, things went over the edge with office space.

In the second quarter of 2019, the city had 11.5 percent of its office space vacant. By early 2020 that number had climbed to 14.4 percent, and by the spring it stood at 14.8 percent.

Nash said the average numbers in 2019 we are about 11 percent, with 2020 at about 14 percent. In 2021, the vacancis popped up to 17 percent, but this year, she said the numbers are back around 14 percent, according to data provided by Advisra Consulting in Milford.

“Offices became an issue a few years before the pandemic because the way people work in digital technology changed the landscape of how people work,” said Nash.

In 2017, Nash and her team started to research what kind of offices were becoming vacant. Specifically, the team wanted to know if the vacancies were occurring in the larger buildings, or were entire smaller buildings becoming vacant.

“Other questions we were asking are: Is it downtown? Is it in the outskirts? What companies were in those spaces? And were they downsizing or leaving the state?” said Nash. “These were questions that we were all starting to have. Reinventing office is certainly something we are looking at, and people are looking at from across the country.

“You can see before the pandemic, and through the pandemic, vacant office space went up three percent, which is a lot,” added Nash.

Milford is not the only city seeing an increase in vacant office space. For all of 2021, Fairfield County recorded about 1.7 million square feet of new office leases, up 23 percent from 2020, according to commercial real estate firm CBRE. It trailed by 13 percent, however, the county’s five-year annual average of about 1.9 million square feet.

Nash said her office is not getting a lot of calls inquiring about offices, but they are receiving a lot of calls for co-working space, and more specifically, they are fielding calls asking about conference rooms.

“If they have clients coming in, they have a professional place to bring them, and they can throw up a presentation,” she said.

Before the pandemic, co-working space was a big deal in Connecticut, Nash added.

“The state of Connecticut had a grant for it, and they ran out. I had discussed with some of the co-working spaces throughout the state, pre-pandemic if this is something we needed, but they seemed to fall out of favor for a little while, and now they are high again,” she said.

One of the office spaces in Milford that is doing an entire remodel of its amenities and office space is 470-488 Wheelers Farm Road, a 450,000-square-foot building that was constructed in the 1980s by Equitable Life Insurance Company.

“We had a co-working operation here, but that is closed. But we are considering re-opening it,” said Joseph Coci of Mountain Development Corp. “We have several tenants that want a co-working space, and they came from Julie Nash.”

The property had previously housed high-profile tenants including IBM, Sikorsky Aircraft Corporation, The Warnaco Group, Ann Taylor and Dassault Systèmes. Under the new management of Pent Park, owned by M3 Equities, Coci said it would be done this year.

The two reasons the amenities and offices are being remodeled are both because of the new management, and the interest they are receiving in the space.

“There’s been quite a bit of activity going on here,” Coci added.

The location will have remodeled common areas, a full-service executive cafeteria, a state-of-the-art fitness center, an improved conference center with a larger training room and private conference rooms, an improved game room and more. Pent Park also offers custom build-out and furniture packaging for businesses looking to use available office space on the 50-acre campus.

“Businesses like WeWork and others of that nature have created the co-working impetus, and that is part of the market now,” Coci added. “But another part of it is just tenant demand and companies relocating here from out of the state or from other parts of the state.”

At the city level, Nash and her team are working on an economic development strategic plan.

“It will help us pick pathways that will lead to success in areas that need help like office space,” said Nash. “It will take the temperature of business in the city and find avenues that we can take and have a road map for the next several years, that we can go down and get us back to a better place than we are now.”

However, some challenges in re-creating an office space into a co-working space are zoning laws.

“Sometimes, the building can only be used by the building patrons,” said Nash. “So co-working businesses will come to us to change the zoning, so they can have a facility that will attract not only people in the building but also in the surrounding area.”

Another idea Nash has heard from office owners in Milford and across the state is turning offices into living spaces.

“Again, those take big zoning changes, and you can’t spot zone,” she said. “You can’t just change the zone of one building. It has to be the entire zone. There’s a lot that goes into changing a zone like that.”

In 2021, the Planning and Zoning Board approved 14 live-work units, making them the first of their kind in the city. The live-work model will allow business and residential use within the same space.

The board approved a special exception to create the 14 live-work units because the current zoning did not allow for such units.

But the one idea that Nash and her team are hearing the most and what they would like to do in Milford is attracting larger companies to have hubs in the city.

“It’s hard to access talent when you are in one specific location. But when you go remote, you have access to an enormous amount of talent,” she said. “Larger companies are going to decrease their office space capacities, so why can’t there be hubs for these large companies here in the city?”

Nash and her team are doing a real estate audit with Goman+York Property Advisors, and the purpose of that is to see all the commercial properties in Milford.

“We want to see who is in there, what kind of taxes they are paying, how long their lease is, how many true vacancies do we have,” she said. “We want to have a good handle on the landscape.”

The auditing software is expensive, and the work is difficult, Nash said.

“But we are finally doing it, and I’m so excited about it,” she said. “It’s going to give us a good handle on what’s happening in the city especially office space, because they are our largest vacancy now, and have been for a very long time, but that is a trend across the country.”