Survey sees steady growth for Westchester.

Buoyed by relocations and expansions, the Westchester County office market held its own during the first half of 1995, according to the Rostenberg-Doern 1995 Midyear Corporate Real Estate Report.

Absorption totaled 106,014 square feet. The county vacancy rate was 22.1 percent at midyear, essentially unchanged from the end of 1994. Construction activity, which has been at a standstill since 1991, totaled 130,000 square feet. Of the five market areas surveyed in the county, absorption was either flat or negative in four of the five areas. Only the office market in the southern half of the county reported significant absorption, totaling nearly 169,000 square feet.

Companies moving to Westchester County or expanding their presence here during the first six months of the year included Abitibi Price, Heineken USA, Arthur J. Gallagher, PAXAR, Pico Electronics, Physicians On Line, Mitsubishi Paper, MTC Corp. and Dansk.

Downtown White Plains showed little improvement from six months ago, with a midyear vacancy rate of 30.3 percent. The outlook for White Plains dimmed somewhat with Prodigy's announcement that it plans to move its headquarters to Manhattan. Future downsizing by NYNEX and IBM, two of the county's largest space users, is also a source of concern for the Westchester office market.

Three important corporate moves announced in 1994 began to take shape during the first half of 1995. MasterCard International began moving its corporate headquarters from Manhattan to Purchase; Ciba Corp. broke ground on an office/lab facility in Tarrytown and is moving its U.S. headquarters facility from Ardsley to Tarrytown; and construction started on the Malcolm Pirnie headquarters in Harrison.

"It is unlikely the Westchester County office market will equal last year's record-setting pace. The market appears to be following a path similar to the national economy, which saw a strong 1994 recovery followed by a steady but less spectacular 1995," said William V. Cuddy, Jr., senior vice president of Rostenberg-Doern Company, Inc. "The county's office market should continue on a steady but sustainable growth path; however, we do anticipate further corporate downsizings."

The survey of Westchester County's five market areas showed:

In the Westchester County Central Business District, downtown White Plains, the county's central business district, reported a negative absorption of nearly 53,000 square feet for the first half. The city's midyear vacancy rate of 30.3 percent is down slightly from six months ago. Except for Heineken USA's headquarters move from New York City to 50 Main Street, there were few major lease transactions to report for the first half of the year. The opening this Spring of The Westchester retail mall and the new Federal Courthouse should help revitalize the downtown market. Major Deals: Bartlett, McDonough, Bastone & Monaghan, and Heineken USA.

Westchester County East

The eastern half of the county had a number of significant deals, including PAXAR's headquarters move from Rockland County to Harrison; Arthur J. Gallagher's move from downtown White Plains to Westchester Avenue; and the relocation of Abitibi Price from New York City to Purchase. These three moves accounted for nearly 72,000 square feet in new leases. However, absorption was fiat and the vacancy rate rose slightly to 20.9 percent. The outlook for this market, which includes Harrison, Purchase and Rye, hinges on future decisions by its largest space users, namely Advantis (an IBM subsidiary) and NYNEX. Major Deals: Abitibi Price, Advanced Diagnostic Imaging, Arthur J. Gallagher, Dansk, Mitsubishi Paper, MTC Corp., Nationwide Insurance and PAXAR.

Westchester County West

The Route 119 office corridor on the western side of the county ended the first half with a negative absorption of 12,318 square feet and a vacancy rate of 16.2 percent, up from 14.5 percent six months ago. Two of the market's major properties - the Christiania Building and 303 South Broadway - were sold during the first half of the year. In what is the only new construction activity in Westchester in more than four years, Ciba Corp. broke ground this Spring on a new office/lab facility in the Tarrytown Corporate Center. Major Deals: AIG, Physicians On Line and Synon.

Westchester County North

Absorption was flat for the first six months in the county's northern office market, while the vacancy rate slipped from 24.7 to 23.7 percent. Leasing activity was generally steady at major business parks in Mount Pleasant, Mount Kisco, Hawthorne and Armonk. In the largest deal in this market, Richard Diamond/CIDCO acquired a 140,000 square-foot building on Columbus Avenue in Mount Pleasant. The company will occupy 60,600 square feet of space in the building, which was formerly occupied by IBM. Major Deals: Credit Clearinghouse, Icahn Enterprises, Insurance Software, Long Island Cheese & Specialty, and Richard Diamond/CIDCO.

Westchester County South

The southern office market, which is primarily Yonkers, New Rochelle and Mount Vernon, outpaced the rest of the county, with absorption of nearly 169,000 square feet of space and a vacancy rate of 13.2 percent, down from 18 percent at year-end 1994. Pico Electronics occupied 51,650 square feet of space in Pelham and Shark Products took over 15,000 square feet in New Rochelle. Major Deals: Mary Ann Liebert, Inc., Merrill Lynch, Pico Electronics, Shark Products and Stanley Wasserman Real Estate.

More than 260 multi-tenant Class A and B buildings in Westchester County were surveyed. Government-owned and occupied buildings, owner-occupied buildings, medical office buildings and buildings under 20,000 square feet were excluded.