Steady improvement in Westchester county office market.
Companies that expanded this quarter included Argent Mortgage Company, which leased an additional 90,000[+ or -] square feet (sf) at 333 Westchester Ave. in White Plains, bringing their occupied space to approximately 200,000 sf; Progressive Insurance, which grew from 12,000 sf to 17,081 sf at 1 Executive Blvd. in Yonkers; and PepsiCo, which leased an additional 18,221 sf at 100 Summit Lake Dr. in Valhalla.
"Westchester County vacancy levels increased during the third quarter, rising one full percentage point from 16.9 percent in the second quarter to the current level of 17.9 percent," said Michael B. Gordon, Director of Business Development for Cushman & Wakefield of Connecticut, Inc.
The largest increases occurred in the Eastern submarket, which grew from 16.4 percent last quarter to the current 19.8 percent; largely due to the former AT&T space of 103,382 sf at 500 Mamaroneck Avenue in Harrison; and the Central submarket, which grew one full percentage point to 14.0 percent this quarter. The Southern submarket was the only area in the county that demonstrated a decrease in vacancy from 9.8 percent in the second quarter to the current 9.0 percent.
Leasing activity for the quarter was light at 182,655 sf vs. 354,223 last quarter and 426,613 sf during the first quarter. Major lease transactions included Pentegra's renewal of 30,000 sf at 108 Corporate Park Dr. in White Plains; New York Life's 24,485-sf renewal at 411 Theodore Fremd Ave. in Rye; and an 8,769-sf lease by School Specialties at 2 Skyline Dr. in Hawthorne. Additionally, a number of large tenants in the market are expected to execute leases in the fourth quarter.
One of the most innovative transactions this quarter was the sale of the Schott Corporation's U.S. headquarters at 3 Odell Plaza in Yonkers. The building was sold to Mack-Cali for $6 million, with Schott leasing back approximately 37,877 sf on a short-term basis prior to its move to 555 Taxter Road in Elmsford (also a Mack-Cali property). Simultaneously, Mack-Cali leased 37,877 sf (the entire office component) at 3 Odell Plaza to Montefiore Medical Center for a 15-year term.
Despite an increase in demand for office investment properties, sales activity is lower for the first three quarters of 2003 compared with the same period last year. With sales up 7.5 percent nationally, this drop off is attributable to the lack of office product available for sale in the county. There were, however, two major sales transactions in Westchester this quarter: Ivy Equities sold the 120,393-sf 2975 Westchester Ave. office property in Purchase to RPW Group for $18.5 million; and in the aforementioned multi-tiered transaction, the sale of 3 Odell Plaza in Yonkers to Mack-Cali for $6 million.
OFFICE MARKET STATISTICS BREAKDOWN ? OVERALL CLASS A & B Westchester County 3Q '03 2Q '03 2Q '02 Overall Vacancy 17.9% 16.9% 17.1% White Plains CBD 3Q '03 2Q '03 2Q '02 Overall Vacancy 21.8% 21.3% 21.6% White Plains Non-CBD 3Q '03 2Q '03 2Q '02 Overall Vacancy 21.5 21.7% 21.0% Northern 3Q '03 2Q '03 2Q '02 Overall Vacancy 15.5 15.4% 13.8% Central 3Q '03 2Q '03 2Q '02 Overall Vacancy 14.0 13.0% 21.0% Eastern 3Q '03 2Q '03 2Q '02 Overall Vacancy 19.8 16.4% 11.0% Southern 3Q '03 2Q '03 2Q '02 Overall Vacancy 9.0% 9.8% 11.0%
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|Title Annotation:||Third Quarter Review|
|Publication:||Real Estate Weekly|
|Date:||Oct 29, 2003|
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