In the past few months, Westchester County”™s commercial office market has witnessed its ups and downs.
It has seen Pepsi Beverages agree to a massive investment at its complex in Somers and Kawasaki decide to remain at its facility in Yonkers. However, Westchester has also recently learned of Nokia”™s planned move from its offices in the county and Bayer”™s anticipated exit from its offices in Tarrytown to a site in New Jersey.
After a steep decline in leasing activity that resulted in a negative absorption of what one brokerage firm estimated was in excess of 700,000 square feet in 2010, commercial brokers believe the office market here will bounce back in 2011.
At the end of the first quarter, major brokerage firms reported the county”™s office availability ranged from from 16.7 percent to as high as 22.8 percent.
Glenn Walsh, senior director of Cushman & Wakefield, said a number of large users are looking for office space in the county. “There is a lot of activity on the east side,” he noted. “A lot of it I am sure is just shuffling of the deck chairs.”
Several firms seek space of approximately 100,000 square feet and others are in the 90,000-square-foot and 80,000-square-foot range, as well as for 40,000 square feet and 30,000 square feet. Walsh would not reveal the identities of the companies on the market for space, but said several could close in the near future.
He said a vast majority of the companies that are looking for space are existing Westchester firms that are considering possibly relocating to offices of a similar size but are perhaps wanting to upgrade the quality of their space.
Walsh predicts that the Westchester County office availability rate will decline in 2011 and that there could be between 100,000 square feet to 200,000 square feet of positive absorption of space.
A positive for the Westchester County marketplace has been the efforts by New York state, Westchester County and the county”™s two chief business organizations ”“ The Westchester County Association and The Business Council of Westchester ”“ to reposition how the county is viewed as a business location.
“We are in the embryonic phase of this now and we need bring it to the next level and put some concrete plans in place and begin to implement them,” he said.
John Goodkind, managing principal of Newmark Knight Frank, said he believes the office market in Westchester will remain “steady” in 2011, with not a lot of space coming on the market, but not a brisk amount of leasing activity either until the general economy improves further.
“It is not negative. It is not robust. It is somewhere in between,” he said. Due to the county”™s attractive rents, Goodkind believes the county offers “good value” at attractive prices. Newmark Knight Frank pegged the county”™s overall asking rent at $26.22 per square foot at the end of the first quarter of 2011, down from $26.91 per square foot a year earlier. Neighboring Fairfield County”™s average asking rent stood at $30.68 per square foot at the end of the first quarter of this year, down from $32.03 per square foot 12 months earlier.
