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Third quarter slow, but outlook bright for Westchester.

It was a quiet summer for the Westchester County office market, with generally flat absorption of office space and a countrywide vacancy rate holding steady at about 24 percent.

According to the Rostenberg-Doern Quarterly Office Market Report, the Westchester County's office market reported a negative absorption of 31,922 square feet during the third quarter of this year. The third-quarter vacancy rate of 24 percent was up slightly from 23.8 percent three months ago.

Three of the five market areas surveyed in the county reported positive absorption and declining vacancy rates. Construction activity was unchanged at 263,000 square feet of space underway.

"Although the third-quarter statistics point to a relatively quiet office market, there are a number of major deals in the works involving key office properties. We anticipate that many of these deals will be completed by the end of this year, which would lead to a surge in leasing activity and a decline in the county-wide vacancy rate to about 20 percent," said William V. Cuddy, Jr., senior vice president of Rostenberg-Doern.

"Until recently, the Westchester office market was driven by companies looking to relocate primarily for economic reasons, but now that rents have stabilized and the economy has recovered, companies are basing their leasing decisions on the fact that they need more space to grow their business. This is a positive and healthy sign for the market," Cuddy said.

Cuddy noted that the market for Class A space is tightening, especially in downtown White Plains, where there are only three office buildings with 30,000 square feet of contiguous space available for lease. "Large blocks of prime space in the city's better buildings are becoming more difficult to find in White Plains," he said.

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

Westchester County Central Business District

Downtown White Plains posted a negative absorption of just over 100,000 square feet, and the city's vacancy rate rose from 26.6 percent at mid-year to 28.3 percent. Downsizing by NYNEX and the New York Power Authority adversely affected this market. Major deals included Divney Consulting and Teachers Insurance.

Westchester County East

The office market on the eastern half of the county, which includes Purchase, Rye and Harrison, bounced back from a difficult first half. Absorption totaled 57,215 square feet of space. This market, which reported a negative absorption of 705,053 square feet for the first half of 1996, benefitted in the third quarter from expansions, as well as relocations from within the county. Major deals included Allstate, First Translife Insurance, Headquarters Companies, RH Donnelley, Transamerica, and Zeus.

Westchester County West

The western half of the county, which is primarily Tarrytown and Elmsford, reported 61,645 square feet of space absorbed for the third quarter. The vacancy rate declined from 14.7 percent at mid-year to 12.8 percent, which is the lowest vacancy rate in the county. Major deals included CNA, Liberty Mutual, Westchester County, and ZREX.

Westchester County North

The vacancy rate in the northern half of the county fell from 16 percent to 15.6 percent, and absorption totaled a modest 16,901 square feet for the quarter. The Mid-Westchester Executive Park in Hawthorne reported excellent leasing activity. Major deals included Cityscape, Coca-Cola Bottling Co. of NY, Lucent Technologies, and Nextwave.

Westchester County South

There was little leasing activity in the southern portion of the county, an area that includes Yonkers, New Rochelle and Mount Vernon. Absorption was a negative 67,491 square feet and the vacancy rose from 15.4 percent at mid-year to 17.6 percent.
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Title Annotation:real estate industry in Westchester County, New York
Publication:Real Estate Weekly
Date:Oct 16, 1996
Previous Article:Vacancy falls in Fairfield County market.
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