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White Plains: a cut above the rest: as vacancy rates dip and rents soar, experts tip 2008 as city's year.

Neighborhood hairdressers in White Plains recently began repositioning their budget businesses to offer $70 haircuts. While far less than what presidential hopeful John Edwards pays to lower his ears, it nevertheless signals the tremendous turnaround this Westchester city has undergone over the last five years.

Real estate brokers haven't forgotten what their jobs were like in the late 1990s, when office vacancy rates (around 30%) were among the highest in the country. But what was once a desolate wasteland for the commercial real estate industry has become a hub for law firms, restaurants and national retailers.

"National retailers are coming in and, certainly along Mamaroneck Avenue, you've got a lot of banks going in there," said John Barrett, director of sales for Massey Knakal Realty Services. "But no one industry is driving it."

According to Barrett, retail rents were in their teens just five years ago. Today the city has seen asking rents hover around $70 psf. White Plains' Class A office property goes for more than $40 psf, while other Westchester cities are experiencing $25 psf asking prices. And office vacancy rates--which have plagued the city for years--have dropped to 10%.

And there are abundant examples of projects leading the way.

Avalon Bay is developing a high rise at 27-29 Barker Avenue that's earmarked for 400 plus residential units, the Westchester Mall is thriving once again, Best Buy and Wal-Mart have opened downtown and Capelli Enterprises is adding two more 30-story towers to their White Plains resume, which includes the City Center project--a mixed use development credited with spurring downtown's revitalization.

City Center spans more than one million square feet and has brought big name retailers to a retail-starved downtown. The gargantuan complex houses Target, Circuit City, Filene's Basement, Barnes & Noble, New York Sports Club, Legal Sea Foods, Atlanta Bread Company, a cinema and others. And residential options there include Trump Tower, One City Place and The Lofts at City Center.

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"In White Plains, some of the residents are worried about runaway development, but most of the people like what they see," Barrett said.

The residential population may be a mere 54,000, but the city's population swells to 200,000 during the workweek, as more and more law offices, technology firms and universities are investing in the area. As a result, 1700 new residential units are under construction.

Another sign of remarkable progress is the grand opening of The Ritz-Carlton Westchester. The 44-story hotel at 3 Renaissance Square opened its doors last month. The 118-bed hotel shows the demand for high-end products in White Plains. The development also features a 10,000 s/f spa, luxury residences and BLT Steak--a contemporary American steakhouse.

"The growth of this region, with so many corporate headquarters located in the surrounding area, ensures a solid base of corporate travel," said Simon Cooper, president and chief operation officer at The Ritz-Carlton Hotel Company.

The Ritz-Carlton serves as a reminder of White Plains' Renaissance and such developments, along with new downtown residences, are helping to fuel the area's retail along Mamaroneck Avenue--an area some are calling a "city within a city." But even just a few years ago, White Plains was far from poised for development, let alone anything high end.

"The Ritz-Carlton wouldn't have considered White Plains five years ago," said Glenn Walsh, a senior director at Cushman & Wakefield. "Everybody who came in said this was a dead city, and you wouldn't want your employees working here at night. It was a ghost town."

But over the last five years, he said, people have left the suburbs and returned to downtown White Plains. And on the commercial side, businesses are snagging office space--a trend sparked by the surge of law firms, like Greenberg Traurig, that are leasing space there.

Over the last two years alone, Walsh has seen asking rents jump $10 psf. "It's a spike we've never seen in Westchester," he said, likening the city's revival to Stamford's. In addition to downtown Capelli developments, Walsh also credits train station renovations with jumpstarting commercial demand there.

Just a 40 minute ride into the city, enterprises squeezed out of Manhattan and Greenwich are beginning to bring their business to White Plains. And a plethora of developers have high hopes for large mixed-used projects by the station.

Today's downtown has high-end residences, restaurants, chain retailers and a plummeting office vacancy rate that brokers will continue to capitalize on; they expect the revival of the White Plains' market to strengthen even further in 2008. "It's going to get very tight, very quick," predicted Walsh.
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Title Annotation:Commercial Sales & Leasing
Comment:White Plains: a cut above the rest: as vacancy rates dip and rents soar, experts tip 2008 as city's year.(Commercial Sales & Leasing)
Author:Turcotte, Jason
Publication:Real Estate Weekly
Date:Jan 9, 2008
Words:760
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