Westchester County lost a long-shot bid to lure the U.S. headquarters of Bayer AG, in the process losing hundreds of Bayer jobs currently in Tarrytown to New Jersey where Bayer will remain based.
Bayer has long been a major employer in Tarrytown, expanding the operation in 2006 when it moved its diabetes care operations here from Indiana. The company has another local connection ”“ it has been working with Tarrytown-based Regeneron Pharmaceuticals on diabetes treatments. According to the Bergen Record, the company considered Tarrytown as a potential consolidation site for its world headquarters, but took some $38 million in incentives to stay in New Jersey.
The Record reported that Bayer Healthcare Pharmaceuticals is considering locations in Wayne, Morristown and Montville.
Unknown are the incentives New York and Westchester County may have offered as an inducement to Bayer. The company expects to begin the consolidation this year and complete it in 2013.
The restructuring marks Bayer”™s biggest overhaul of its tristate area operations since 2006, when it shut down a major campus in West Haven, Conn., that subsequently was purchased by Yale University. Yale plans to build its own massive life-sciences research operation there.
For Westchester, it amounts to another loss of a major corporate tenant, as Starwood Hotels & Resorts Worldwide Inc. readies to relocate to Stamford, Conn., after a decade-plus stay in White Plains.
On the plus side, PepsiCo recently confirmed it would keep its bottling operations in Somers, after having considered Danbury, Conn., as an alternative ”“ according to C.B. Richard Ellis, which brokered the transaction, at 540,000 square feet it was the largest lease deal in the history of Westchester County.
The corporate machinations come against an overall first-quarter improvement in the commercial real estate market in Westchester ”“ and by extension the jobs market that fills company facilities.
The overall county vacancy rate dipped to 16.7 percent in the first quarter, according to the Stamford office of Cushman & Wakefield, down from 17.1 percent and 17.5 percent in the fourth and first quarters of 2010, respectively.
Despite the decrease in the vacancy rate, the direct average rent also fell to just above $30 a square foot, down a full dollar from a year ago.
On a net basis, tenants took an additional 67,000 square feet of space in Westchester during the quarter, with upscale class A offices making up for a loss of some 29,000 square feet in the class B offices used by many small businesses.
By contrast, in Fairfield County, Conn., the vacancy rate edged up to 19.5 percent in the first quarter, according to the Stamford office of Cushman & Wakefield. Despite the vacancy rate increase, the direct average rent also inched up to just above $33.50 a square foot.
The outlying business districts of White Plains remain the easiest place to find class A office space, with nearly one in every four square feet available. The smallest market, that in the southern part of the county, had the tightest vacancy rate at 15.5 percent for class A space.
“A lot of deals have run into the second quarter,” said Jim Fagan, senior managing director of Cushman & Wakefield”™s regional office in Stamford. “While we clearly see the bottom of the cycle in our rearview mirror, the path that we”™re on is rarely a straight path. Before, we were looking for events that turned into a trend ”“ now it is a trend.”
