Defying corporate downsizing, Westchester market rebounds.

Savvy building owners dividing large, contiguous blocks into 25,000 to 35,000 square feet and smaller for start-up businesses are setting the stage for an office market recovery, according to a 1999 yearend real estate report issued by the Research Consulting Services Group of Cushman & Wakefield, serving Westchester County.

"Until recently, Westchester was coping with the large vacancies left by corporate downsizing. Today, improved market conditions, building renovations, the growth of new industries, and attractive rental rates have shifted the pendulum and a market recovery is underway," said Ken Krasnow, managing director of Cushman & Wake-field's New York and Connecticut offices.

Building renovations spurred an intensified level of leasing activity during the second half of 1999. The White Plains Central Business District leased 359,492 square feet during the second half of the year, with 197,011 square feet leased during the fourth quarter.

Four buildings completing renovations during 1999 included: 333 Westchester Avenue, 445 and 360 Hamilton Avenue, and 120 Bloomingdale Road. All properties are located in the downtown or periphery of White Plains.

"Small and mid-sized companies need to move quickly and are able to do so when properties with smaller flexible units become available," said Krasnow. "These properties are experiencing strong rental activity and the average asking rental rate of $26.61 per square foot is much less than $35 per square foot found in parts of neighboring Fairfield County."

Vacancy Rates

According to the Cushman & Wakefield Research Consulting Services Group, Westchester County's overall vacancy rate has declined from 17.6 percent in 1998 to 15.2 percent in 1999. The White Plains non-central business district posted a significant decline in direct vacancy, finishing at 20.6 percent, as compared with 26.2 percent in 1998. This represents the largest drop in the county from year to year.

Increased Sales Activity

Westchester experienced continued sales activity. A total of 14 buildings sold for a total of $168.1 million in 1999, as compared to over $400 million in sales for 21 buildings in 1998. Highlights of investors purchasing space during the year include: 500 Mamaroneck Avenue in Harrison for $30 million by W&M Properties; 440 and 450 Mamaroneck Avenue in Harrison for $42.1 million by Property Reserve, Inc.; and 900 King Street in Rye Brook by Brickman Associates for $10 million. A group sale by Ivy Equities for $33 million included 244 Westchester Avenue and 104 Corporate Park Drive in White Plains, 2975 Westchester Avenue in Purchase, and 411 Theodore Fremd Avenue in Rye.