C&W: leasing up in Westchester.

Cushman & Wakefield (C & W) released first quarter statistics for the Westchester County office market that show a significant increase in leasing activity, marked by unusually large transactions in the first quarter of 2003. Additionally, direct average asking rental rates rose slightly in all Westchester County submarkets, with the exception of the Southem submarket

The Westchester County office market began the year with a flurry of leasing activity and interest, with a shift in transaction size. Historically, the transaction mix in Westchester has been weighted towards smaller tenants of 7,000 SF and under. During the first quarter of 2003, however, larger transactions ranging from 11,000 to 118,000 SF dominated the landscape.

As of March 31, leasing activity for the first quarter of 2003 reached 426,613 SF, which is already above last year's total of 376,682 SE The White Plains Non-CBD had the greatest total with over 170,000 SF leased. The largest lease of the quarter occurred here with Argent Mortgage Company leasing 118,000 Sf at 333 Westchester Ave.

Other significant leases in the first quarter were USI Insurance for 31,538 SF at 555 Pleasantville Road in Briarcliff, Bresnan Communications for 28,107 SF at 1 Manhattanville Road in Purchase and Columbia Presbyterian at 1 Gateway Plaza in Port Chester for 23,718 SF.

Along with the increase in leasing activity, direct average asking rental rates also rose this quarter. The direct average asking rental rate for class A space in the White Plains CBD at the end of 2002 reached $31.26 per SF. In the first quarter of 2003, that rate increased slightly to $31.37 per SF.

Mike Gordon, director, business development for C&W's offices in White Plains, New York and Stamford, Connecticut, which cover the Westchester County market, commenting on the changes in the quarterly statistics stated, "The increase in leasing activity and shift in transaction size is primarily attributable to how companies are now evaluating the need for geographic diversity. Budgetary restrictions combined with operating mandates for geographic diversity are making Westchester County an optimal choice for relocation."

According to Gordon, The flood of sublease space that came to the market in 2002 seems to have ceased for 2003. In fact the largest addition was Alliance Capital's release of its 21,057 SF space at 925 Westchester Ave. in White Plains. This brought the total sublease space available by Alliance Capital to over 42,000 SF. The grand total for sublease space in Westchester County is 895,800 SF. While still a significant number, it is a decline from the third quarter 2002 total of over 1 million SF.

The trend towards geographic diversity can also be seen in the recent New York Life Insurance Co. purchase of the 383,000-SF Mount Pleasant Executive Center in Mount Pleasant, which has been vacant for about four years. The combination of this transaction with the Argent lease will virtually eliminate any contiguous space option in excess of 200,000 SF in all submarkets but the White Plains CBD.