Total annual office leasing in Westchester was up 73% in 2021 from the activity level of 2020, according to a report released today by commercial real estate services firm CBRE. Also up 73% was the level of fourth-quarter leasing activity when compared with activity in the third quarter of the year. Activity for the entire year of 2021 surpassed the five-year average for office leasing by 9%.
Total annual office leasing amounted to 964,000 square feet in Westchester during 2021, according to CBRE’s statistics.
Leasing activity in the fourth quarter of 2021 totaled 395,000 square feet, up 73% from the third quarter of the year and 79% above the five-year quarterly average.
CBRE reported that prime movers of the leasing activity in 2021 were nonprofit organizations and health care companies, which accounted for 26% and 17% of the activity, respectively. It said that Westchester continues to demonstrate attractiveness for the health care and research and development sectors due to its labor force and proximity to New York City.
Average asking rents remained flat in 2021 when compared with 2020 at $29.48 per square foot.
CBRE said that the surges of Covid and emergence of the Delta and Omicron variants tested the ability of the market to grow.
“The U.S. economy is learning how to function amid the pandemic. Sturdy
income growth, robust consumer spending, and business investment should remain elevated and support GDP (gross domestic product) growth in the mid-4% range for 2022,” CBRE said.
The firm pointed to improvements in the employment picture in the Hudson Valley despite problems in the hospitality, food service and accommodations areas.
“Office-using employment in the Hudson Valley is now at 99.0% of pre-Covid levels,” CBRE reported. “The recovery has been driven by surging professional and business services job growth which is presently at 104% of its pre-pandemic level, making
up for lagging information and financial activities gains.”
Westchester County’s top three office leasing deals for the fourth quarter of 2021 according to CBRE were:
- Kaufman, Borgeest & Ryan LLP’s 44,000-square-feet renewal-expansion at 200 Summit Lake Ave., in Valhalla;
- Strategies for Wealth’s 22,000-square-feet renewal at 800 Westchester Ave. in Rye Brook;
- Arch Capital Group Ltd.’s 22,000-square-feet transaction at 360 Hamilton Ave. in White Plains.
In 2021, the White Plains Central Business District accounted for 32% of all leasing activity, despite having only 19% of Westchester’s inventory, according to CBRE.
