The commercial real estate markets in Westchester and neighboring Fairfield County, Conn., appear to have entered a “bottoming out” phase, in the words of brokers from Cushman & Wakefield, with improved fundamentals expected going forward.
It can come none too soon, according to Jim Fagan, senior managing director of Cushman & Wakefield”™s Rye Brook and Stamford offices, who termed 2009 “downright scary” in his industry.
“You couldn”™t determine what the market rents were,” Fagan said. “We didn”™t know what ”˜low”™ was.”
Westchester”™s rate drops
Westchester County”™s vacancy rate dropped from 21.4 percent in June to 20.3 percent near the end of the third quarter.
No lease deal exceeded 30,000 square feet in the third quarter ”“ possibly the first time that has happened since the recession of the early 1990s, according to Cushman & Wakefield.
Some of the significant lease transactions in the county were:
Cardinal McCloskey Services, 18,000 square feet, 115 Stevens Ave., Valhalla;
Westchester Plastic Surgery, 17,000 square feet, 440 Mamaroneck Ave., Harrison;
UTC Fire and Security, 15,000 square feet, 6 Skyline Drive, Hawthorne; and
Raynet Technologies, 10,600 square feet, 120 White Plains Road, Tarrytown.
Rental rates are at about their levels of two decades ago, and Fagan said it could be as long as three years before the commercial real estate market fully regains its footing.
“What”™s going to drive this recovery is business investment and business hiring,” said Ken McCarthy, managing director of research for Cushman & Wakefield.
Tracking transactions
In Fairfield County, tenants took leases on 423,000 square feet of space, down 35 percent from the second quarter and 33 percent from the third quarter of 2009.
The countywide vacancy rate crept up slightly, from 19.3 percent in the second quarter to 19.5 percent in the third.
The largest transaction in the second quarter was GE Asset Management”™s deal to take nearly 160,000 square feet of space at 1600 Summer St. in Stamford, under sublease from Purdue Pharma L.P. The General Electric Co. unit is currently at 3001-3005 Summer St.
General Motors Corp. had the largest direct lease in Fairfield County during the quarter, moving into 26,000 square feet at 39 Old Ridgebury Road in Danbury.
