Northern suburbs show stability despite economic lull: business fuelled by major relocations from Manhattan.Both the Fairfield and Westchester County commercial real estate office markets have shown relative stability thus far this year despite ongoing national economic slowness. In fact, Westchester County's office market, fueled by major relocations from Manhattan and expansion of existing companies, has fared much better than many New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. submarkets, both in terms of leasing activity and positive net absorption. Fairfield County Fairfield County is the name of three counties in the United States:
While both markets fared relatively well, Westchester County's results in the first half of the year can actually be characterized as "strong". Every segment in the market saw availability drop to pre-downturn levels as above average leasing activity resulted in positive net absorption. Interestingly, at 1.3 million square feet, leasing velocity countywide coun·ty·wide adv. & adj. Throughout a whole county: found at locations countywide; a countywide search. Adj. 1. exceeded the 10-year historical average by a full 7%. The main reason for this tremendous activity was New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Life Insurance's acquisition of Mt. Pleasant Executive Center, a 383,000-square-foot former IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) facility located in Valhalla. Similar to last year's Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. acquisition of Texaco's former Harrison headquarters, New York Life plans to use Mt. Pleasant Executive Center as a diversification of its Manhattan operations. More than 1000 city employees are expected to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. to this new Westchester location. This move benefits the county's economic development not only through new tax revenues, but also by bolstering the area's housing, retail and service sectors due to the influx of new residents. New York Life's commitment to Westchester also opens the door for the market to fulfill the potential it has always had, but has never had the opportunity to prove due to the large, single user blocks of space that dominated the available inventory. As a result of this transaction, overall availability dropped by more than 11% this year. Despite this, asking rents declined slightly over the past year as low-priced sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. space continues to affect pricing. In addition to New York Life's move, relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. demand in Westchester extended to a wide array of industries including finance, law and insurance firms. Though this relocation trend has been critical to Westchester's overall health, intra-county moves and expansions have also played a major role. Local businesses expanded 35% from last year and relocations within the county grew 11% as users took advantage of the tenant's market to upgrade their space. Tenant-friendly market conditions also proved a major contributor to Fairfield County's uptick Uptick A transaction occurring at price above its previous transaction. In order for an uptick to occur, a transaction price must be followed by an increased transaction price. in leasing activity thus far in 2003. Most of the county's leasing activity, however, continued to come from internal sources, as Fairfield properties failed to attract any major relocations from New York City. Even without any major relocations, though, absorption has been positive so far this year in Fairfield County due to the steady leasing and a decline in space returns. In fact, the market posted 475,730 square feet of positive absorption compared to 61,930 square feet of negative absorption at the same time last year. Despite the positive absorption and leasing activity of 1.7 million square feet in the first half of 2003, overall availability increased slightly in Fairfield as space returned to the market at the end of last year was not completely absorbed this year. Consistent with the increase in available space, especially sublease space, from 2002, average asking rents fell countywide by nearly two and a half dollars per square foot. So, overall, as we enter the last quarter of what has undeniably been a difficult year worldwide, the outlook for Westchester and Fairfield Counties in 2004 appears brighter than at the end of last year. Westchester County remains one of the most robust suburban markets in the region with little sign of slowing, while Fairfield County industry insiders express cautious optimism that the market will continue to improve. BY DEAN J. SHAPIRO, SENIOR MANAGING DIRECTOR CBRE CBRE CB Richard Ellis (real-estate firm) CBRE Chemical, Biological, Radiological and Explosive CBRE Component-Based Reliability Estimation CBRE Coldwell Banker Richard Ellis (Boston, MA) WESTCHESTER/FAIRFIELD |
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