Growth in inventory hampers Westchester recovery.
According to the Rostenberg-Doern Quarterly Office Market Report, the first-quarter vacancy rate for Westchester was 27.8 percent, up from 26.9 percent three months ago. Absorption, which is the net increase or decrease of occupied space over a period of time, was a negative 246,443 square feet of space for the quarter.
Leasing activity for the quarter was approximately 350,000 square feet of space. There was no new office construction under way in the county during the quarter.
Downtown White Plains had one of the largest lease transactions of the first quarter - the 32,000 square-foot commitment by Nextel at I North Broadway. Class A office towers in White Plains with multiple transactions in the quarter included Ten Bank Street, 140 Grand Street and 50 Main Street.
The corporate office parks along the I-287 corridor had strong first-quarter leasing activity, primarily by small to mid-sized companies. The average-size lease in this market is between 4,000 and 5,000 square feet of space.
"Well located, quality buildings with stabilized ownership and attentive managers are doing well. What hindered a recovery in the first quarter was the addition of three large blocks of space to the available inventory," said William V. Cuddy, Jr., senior vice president of Rostenberg-Doern Company, Inc.
Among the companies adding, space to the market in the past three months were IBM, with an additional 92,000 square feet at 500 Mamaroneck Avenue, Harrison; Rollins Hudig Hall (formerly F.B. Hall), with 108,000 square feet in Briarcliff Manor; and Citibank, with 115,000 square feet vacated in Pelham.
An encouraging development for Westchester is the recent strengthening of the New York City office market, where vacancy rates are falling and rents are rising. "As the cost differential in rents widens between Westchester and Manhattan, we anticipate that more companies will consider relocating from the city to Westchester," Cuddy said.
The survey of Westchester County's five office markets showed:
Westchester County Central Business District: Downtown White Plains, which has been hard hit by corporate downsizing from IBM and AT&T, reported a positive absorption of 19,042 square feet of space. The city's vacancy rate fell to 34.6 percent, down from 35 percent three months MAJOR DEALS: Andrew A. Hyman Agency, New York State Court of Thatcher Profit.
Westchester County East: The Harrison-Purchase-Rye office market had a negative absorption of 77,490 square feet and a vacancy rate of 27 percent, up from 26.1 percent three months ago. Among the office properties with strong leasing activity during the quarter were 2500 Westchester Avenue, 108 Corporate Park Drive and 244 Westchester Avenue. MAJOR DEALS: Tokyo Leasing USA and Prime Office Systems.
Westchester County West: The vacancy rate for the Route 119 corridor rose slightly from 24.2 percent at the end of 1993 to 25 percent. This market, which had a negative absorption of 28,530 square feet, was hurt by the addition of 23,000 square feet of space at 303 South Broadway. MAJOR DEALS: Advanced Network Systems and Elof Hansson.
Westchester County North: The northern half of the county saw its vacancy rate rise to 28.1 percent during the first quarter, a two percentage point increase from three months ago. Absorption was a negative 81,253 square feet. MAJOR DEALS: Northern Westchester Center for the Arts and Smith Barney Shearson.
Westchester County South: The county's smallest office market, which includes Yonkers, Mount Vernon and New Rochelle, had a 20.2 percent vacancy rate for the first quarter, up from 17.7 percent at the end of 1993. Absorption was a negative 78,212 square feet. MAJOR DEALS: Genesis Health Systems, Magic Restaurants, Novick, Edelstein, et al.
The Rostenberg-Doern Quarterly Office Report is the most comprehensive report of its kind on the Westchester County office market.
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|Title Annotation:||excess of office space affects commercial leasing market in Westchester County, New York|
|Publication:||Real Estate Weekly|
|Date:||Apr 20, 1994|
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