Fairfield gains ground in 1st half; Westchester hurt.

Office markets in Fairfield and Westchester counties moved in different directions during the first half of 1992, with Fairfield County gaining strength from an active Stamford market while Westchester continued to struggle with corporate consolidations, according to the 1992 Mid-Year Corporate Real Estate Report released by Rostenberg-Doern Company, Inc.

Bolstered by a positive recovery in Stamford, Fairfield County reported absorption of approximately 333,600 square feet, an improvement from the 186,700 absorbed for the first half of last year and about 100,000 square feet more than what was absorbed in all of 1991.

The vacancy rate for Fairfield County was 25.4 percent, down from 26.4 percent at the end of 1991. Stamford's vacancy rate has shown a slow but steady improvement, falling them 25.5 percent in 1990 to 23.6 percent in 1991 to the current rate of 22.3 percent. Three of the four market areas surveyed in Fairfield County registered midyear to-midyear gains in absorption. Vacancy rates in all four market areas declined in the last six months.

Caused by major changes in downtown 'White Plains, Westchester County registered negative absorption of approximately 377,000 square feet of space and a vacancy rate of 21.9 percent. This compares to a positive absorption of 261,000 square feet for the first half of 1991 and a vacancy rate of 20.3 percent for the end of 1991. Vacancy rates rose over the past six months in three of the five Westchester County market areas surveyed and for Westchester County as a whole. Absorption at mid-year 1992 in all five markets was lower than the first half of 1991.

Downtown White Plains, which was adversely affected by consolidations of major companies such as AT&T and Prodigy Services, had negative absorption of 387,000 square feet and a record high vacancy rate of 27 percent.

The combined two-county region recorded negative absorption of 43,000 square feet, compared to an absorption of more than 450,000 square feet during the first half of 1991. The region's vacancy rate for the first half of 1992 was 23.9 percent, about equal to the 23.8 percent reported at year-end 1991.

There was no construction activity under way in the region during the first half of 1992, continuing a trend that began almost two years ago.

"While we are encouraged by the recovery in Stamford, there is little evidence in the first half of 1992 that our region as a whole has turned the corner on a prolonged and difficult downturn," said John H. Rostenberg of Rostenberg-Doern Company, Inc. of Stamford, Connecticut, and Purchase, New York.

"The good news for both Fairfield and Westchester counties is that a growing number of smaller to mid-sized companies are leaving New York City and relocating their operations to the northern suburbs," Rostenburg. "Several well-known companies chose to expand in the region during the first half of 1992. Further, existing companies are expanding or repositioning themselves in better space."

Rostenberg said Westchester County's office market is currently undergoing changes similar to those which affected Fairfield County in 1991 when properties owned by F.D. Rich in Stamford were taken over by lenders. "The change in ownership and management at the Schulman Realty Group properties in Westchester County will ultimately prove to be a positive development," he noted. "The institutions taking over the Schulman properties have the resources to make a long-term commitment to what is the heart of Westchester's office market."