‘This would be a real coup for Shelton and CT’: Possible new Subway HQ highlights area’s corporate appeal

In the past year, a number of growing companies have announced plans to open new offices in Fairfield County. Most of that activity has been concentrated in Stamford and Greenwich — but the eastern end of the county also appears to be in a position to land another marquee recruit.

Fast-food giant Subway is planning to relocate its headquarters in Milford to Shelton, according to the latter’s mayor. Such a move would keep one of the world’s largest food-services businesses in Connecticut, while the proximity between the two towns would likely minimize the disruption for employees transferred to a new headquarters.

“To have somebody come from New Haven County into Fairfield County would be exciting, particularly with a big-name company like Subway,” Tom Pajolek, a Stamford-based executive vice president with commercial real estate firm CBRE, said in an interview. “Subway has been very comfortable in Milford for quite a long time, but a move to eastern Fairfield County would not be perceived as particularly disruptive. It would be a continuation of their legacy in that part of the state.”

Exploring possible move

Shelton Mayor Mark Lauretti said this week that a Subway executive informed him last week by text message and in a phone call of the company’s plans.

“This would be a real coup for Shelton and Connecticut because it would maintain the presence of Subway, a corporate heavyweight, here in the state,” Lauretti said in an interview. “This would be good for their employees and the company, and they would join a heavy corporate presence in Shelton.”

Lauretti said he has been “apprised” of where Subway would locate the new headquarters, but he declined to disclose it because, “until the ink is dry on the lease, it would be premature to say where it is within the town.”

In response to an inquiry from Hearst Connecticut Media, Subway declined to comment this week beyond a statement that it issued last week on the potential move.

“Subway is exploring options in northeastern Fairfield County to create a world-class work environment for our employees, that includes a modernized headquarter(s) location, featuring an engaging and welcoming workspace and wide range of on-site amenities,” the statement said. “As a member of the community for nearly 50 years, we look forward to strengthening our long-term commitment to the area.”

If Subway proceeds with a move to Shelton, it would join a robust corporate roster in the town that includes the headquarters of electrical and electronic products manufacturer Hubbell and consumer-goods multinational Edgewell Personal Care, whose brands include Banana Boat, Edge, Schick, Playtex and Wet Ones.

Other companies with a longstanding presence in the town include shipping-and-mailing firm Pitney Bowes, which is headquartered in Stamford, but has about 630 employees based at its operations center at 27 Waterview Drive.

During the past year, Stamford and Greenwich have dominated the office-leasing pipeline in Fairfield County — highlighted by recent or upcoming office openings for the likes of Philip Morris International, Digital Currency Group, iCapital Network, Tomo Networks, ITT and Mirador. But eastern Fairfield County is still churning out new deals. The area including Bridgeport, Shelton, Stratford and Trumbull cumulatively accounted for nearly 105,000 square feet of Fairfield County’s approximately 544,000 square feet of leasing activity in the first quarter of 2022, according to CBRE.

In the county’s largest leasing transaction of the first quarter, Pitney Bowes completed a sale-leaseback of the Shelton operations center. The company sold the approximately 310,000-square-foot property for about $50 million. But it is staying there by leasing 100 percent of the site.

“In 2021, we determined conditions were favorable for a sale-leaseback of our Shelton property, and we went to market negotiating with several potential buyers,” Pitney Bowes, which is headquartered in Stamford, said in a statement. “BDP Holdings from New Jersey was the successful bidder, and we are excited to have them as our landlord for our long-term lease.”

During the first quarter, eastern Fairfield County posted a 25.2 percent office availability rate, compared with a countywide average of 26.5 percent.

CBRE does not maintain office leasing data for Milford and other parts of New Haven County, but executives said that based on their observations, the town would be well-positioned to find new tenants if Subway vacates its current headquarters at 325 Sub Way, which is about a half-mile north of Interstate 95’s Exit 35.

Subway’s potential departure would “leave a vacuum, but at the same time, there’s a very rich and vibrant health care and biotech community in the New Haven area,” Pajolek said. “Those market segments are growing right now, so the space they might vacate in Milford could represent an opportunity for somebody else.”

Messages left this week for Milford Mayor Benjamin Blake were not returned.

In the past 18 months, Subway has apparently already pursued changes to its office footprint. In March 2021, the company signed a lease for more than 64,000 square feet in an office park next to Miami International Airport, with plans to bring 100 employees, according to real estate news outlet The Real Deal. The company said at the time that the offices would house marketing and culinary staff and the company’s Latin American regional offices, but keep most of its employees in Milford, The Real Deal reported.

In the meantime, Subway continues to grow. Last month, it announced plans to hire more than 50,000 people to work in its restaurants across the U.S.

Limiting employee ‘displacement’

A new headquarters anywhere in Shelton would be less than 20 miles from Subway’s current headquarters — a proximity that is among the reasons why the town would be well-suited to hosting a new hub, according to Lauretti.

“I think this move would make sense for a variety of reasons,” Lauretti said. “One is that the people who work for them would not get displaced by coming to Shelton.”

Subway was not able to provide this week a headcount for the Milford headquarters.

Milford-based employees’ adjustment to a new headquarters would be further eased by remote working. Subway has not publicly disclosed the extent to which office-based employees are allowed to work away from the headquarters, but hybrid working arrangements or even completely remote options have exploded in popularity across corporate America during the past two years.

“It used to be that (office-based) people were coming to work five days a week. If they’re coming to work one or two days a week, people may be more tolerant of a longer ride,” Pajolek said. “For most companies, it’s still a work in progress as to how the hybrid work schedules are going to work out.”

pschott@stamfordadvocate.com; twitter: @paulschott