'The workplace is never stagnant'

The global marketing and talent-management firm Octagon has had offices in Connecticut for about 30 years. But until a few weeks ago, its offices in the state had always been located outside a city center.

Now, the company has a hub that is part of an urban nucleus.

Octagon's new headquarters at 400 Atlantic St. in downtown Stamford reflects a trend of companies moving their main offices from suburban locations to more metropolitan areas. At the same time, the migration shows how the rise of remote working during the COVID-19 pandemic has altered the office market because businesses that relocate often take less space than they had in their previous locations.

"The workplace is never stagnant," Octagon CEO John Shea said in an interview earlier this month at the new offices. "We're trying to be as future-facing as we can be, as we design spaces and places for our team to work."

Moving downtown

Octagon's new headquarters on the 11th floor of 400 Atlantic are located a block from Interstate 95 and the downtown Metro-North Railroad station. The company was previously headquartered about two miles south at the Shippan Landing complex. It had moved to Shippan Landing in 2017, following a 10-year stay on the west side of Norwalk, and an initial 10-year stint on the east side of Stamford.

"Proximity to the train and to be able to walk out the door here and have a number of different options for lunch or to meet up after work was a big draw for a lot of people," said Lou Kovacs, Octagon's president for North America. "Commuting via the train or by car, it's just more convenient for people."

The 15-story building at 400 Atlantic previously housed Spectrum services provider Charter Communications, which opened in 2021 a custom-built headquarters a few blocks away. Since then, 400 Atlantic's location, as well as extensive renovations undertaken in the past couple of years, have attracted not only Octagon, but also several other companies. The other recruits include reinsurer Gen Re, which finalized a deal for more than 97,000 square feet last year. Gen Re will move its main offices about 2.5 miles south from its current location at 120 Long Ridge Road in Stamford.

In the past couple of years, several companies have relocated their headquarters to other buildings in downtown Stamford. A couple of blocks from 400 Atlantic, at 677 Washington Blvd., the arrival of tenants such as Philip Morris International, one of the world's largest tobacco producers, and sports entertainment company WWE has helped revitalize a property that had stood empty for several years following the relocation of multinational bank UBS's local offices across the street.

The tenant influx has helped mitigate the vacancy rate in downtown Stamford, an area that has long grappled with large amounts of empty office space. In the second quarter of this year, the availability rate ran at about 22 percent in Stamford's central business district, compared with around 31 percent in the sections of Stamford outside the CBD and a Fairfield County average of around 23 percent, according to commercial real estate firm Colliers.

A few miles west, downtown Greenwich has also maintained its status as a desirable corporate destination, particularly for financial services firms. In the second quarter, the availability rate for Greenwich's central business district ran at about 15 percent, according to Colliers.

In downtown Hartford, where the insurance industry has long called home, the central business district's availability rate ran at about 22 percent in the second quarter, according to commercial real estate firm CBRE.

During the past couple of years, downtown Hartford's leasing activity has been much slower than in downtown Stamford, but the state's capital city has recently notched some notable deals. Engineering firm Fuss & O'Neill plans to relocate this fall its main offices from Manchester to the downtown's Gold Building, where it will take about 23,000 square feet. A couple of blocks away, the University of Connecticut has leased about 51,000 square feet at 229 Trumbull St., to house several academic and research initiatives. Meanwhile, at 242 Trumbull, UConn is planning a student dormitory.

"When UConn Hartford opened its doors seven years ago, the vision included developing deep ties to the city and its residents, synergies with local businesses and organizations, and fruitful connections with city and state government agencies," Anne D'Alleva, UConn's provost and executive vice president for academic affairs, said in May when the university's Board of Regents approved the dormitory plan. "Since that time, the campus has become both a center of learning and a center of community. The addition of student housing nearby would add to that vision immeasurably."

In New Haven, the central business district's vacancy rate ran at about 10 percent in the second quarter, according to commercial real estate firm Cushman & Wakefield. Bioscience companies have accounted for much of the recent leasing volume. Highlighting the industry's local growth is a new 525,000-square-foot hub at 101 College St.

"The location of the new development establishes connections between Yale University's campuses and well-known startup life science companies, attracting top talent," Cushman & Wakefield officials wrote in a report on the second-quarter activity. "The completion of the development signifies progress in New Haven's downtown revitalization project."

Among other cities in the state, some such as Danbury and Norwalk have relatively limited office space in their downtowns and instead have more inventory in office parks outside their central business districts. In the second quarter, the vacancy rates in greater Danbury and Norwalk, respectively, ran at about 26 percent and 42 percent, according to Cushman & Wakefield.

A need for less space

While downtown areas across Connecticut are attracting many tenants, office buildings continue to feel the effects of many companies reducing their office footprints as a result of the increase in remote working that was precipitated by the pandemic.

Octagon's offices cover about 18,600 square feet at 400 Atlantic, about one-third of the footprint of the company's former headquarters at Shippan Landing.

Despite the significant decrease in square footage, Octagon officials said that the company has not made any trade-offs in the quality of its offices. They cite the versatility of the new headquarters, which houses about 100 employees. Its features include adjustable desks that allow staff to work standing up or sitting, alongside a number of meeting rooms and other communal spaces that encourage collaboration and camaraderie. Several employees recently watched the U.S. women's soccer team's 1-0 win against Germany in the Olympic semifinals that was aired live on televisions in one of the gathering areas.

"We've found that there are more flexible ways to work," Shea said. "And because we don't have most people in the office all at one time, a smaller footprint allows us to better utilize the workspace on a regular basis. Part of the move was intended to create a new and fresh work environment, with different types and styles of rooms to accommodate the ways that we work today."

While office downsizing in the past few years has most acutely affected properties outside downtown areas, the trend has also impacted a number of buildings in central business districts. At 400 Atlantic, audio-electronics company Harman last year renegotiated its lease, to decrease its footprint from approximately 68,000 square feet to about 14,000 square feet.

"We have introduced a new concept for all our offices globally called Harman Flex, which essentially provides our managers with unprecedented discretion on when and where their employees report to a physical office," Harman said in a statement last year. "These changes are being placed in effect after taking a deep look into the future of work and the best ways to support our business, our talented workforce and our many global customers."

Given the popularity of flexible workplace options, many companies will probably continue to let their office-based staff work remotely at least some of the time. Nearly 30 percent of employees who work in a hybrid system and 64 percent of employees who are fully remote said that they would be extremely likely to look for other jobs if their employers did not allow them to work remotely at least some of the time, according to Gallup survey data from the second quarter of this year.

"Especially with the labor market remaining tight, employers are continuing to embrace hybrid and remote work as a recruitment tool," Eric Cormier, a manager with Insperity, a provider of HR services, told CT Insider earlier this year. "Top talent wants remote and hybrid work as an option. Savvy leaders understand this. They know that if they were to eliminate hybrid and remote work, they would be at risk of losing valuable candidates to competitors who still offer that flexibility. Retention is also boosted by remote and hybrid options."