With office vacancy rates lingering in the double-digits in Westchester and Connecticut”™s Fairfield County, analysts are not projecting any notable increases in business relocations to the area until the economy shows marked improvement.
That”™s not counting deals like Starwood Hotels & Resorts Worldwide Inc. ”“ which is moving its headquarters to Stamford from White Plains early next year ”“ and other large transactions in the works for some time.
In terms of trends in general, those analysts say, the down housing market has been making it increasingly difficult for individuals to relocate for work, thus posing a bigger challenge for businesses pondering a move.
“The biggest concern is certainly the cost to relocate an individual or a family,” said Dan Keating, senior vice president of sales for Cartus Corp., a Danbury, Conn.-based company that specializes in helping businesses relocate their employees. He said companies looking to relocate workers may need to offer additional incentives for those individuals to move due to the high property taxes and associated real estate costs of living in the Westchester-Fairfield area.
“It becomes a question of how to attract that candidate so they can make the move both from a family perspective and a cost perspective.”
However, Keating cited the allure of the Westchester business community to companies debating whether to relocate their operations and employees to the county.
“The greater New York area has for the longest time been high on the list of costs. But it”™s also one of the most popular places to bring people into just by virtue of the kinds of companies that are located in the tri-state area.”
Besides the high property taxes in Westchester, other issues facing businesses include difficulties procuring loans and securing zoning adjustments, said Edward S. Smith Jr., Northeast regional commercial director of Coldwell Banker Real Estate L.L.C.
“It basically boils down to money,” Smith said. “You have a lot of difficulty today getting loans ”¦ I think over the last couple of months we”™ve seen some of the banks finally loosening up.”
He said that as of the second quarter of this year, office vacancy rates for Fairfield and Westchester counties were 12.8 percent and 11.5 percent, respectively, with retail vacancy rates hovering between 5 percent and 6 percent.
Despite those high numbers, Smith said the region”™s commercial real estate market has likely hit the bottom, with no place to go but up.
“I”™m starting to say and I”™ll say it very gingerly that we”™re reaching close to the bottom as far as the reduction in values on the commercial side and I hope that we will start to see an increase in the values going forward,” he said. “We”™re starting to see people moving within the bounds of the new economy and the activity is there. The activity is the sign that tells us we”™re going to see things moving forward in a positive way.”
Both Smith and Keating expect transit-oriented developments to gain in popularity but said any activity would likely be contingent on an economic recovery.
“Until the financial concerns are satisfied it”™s going to be very, very difficult to see those things really bloom,” Smith said.
Yeah right we hit bottom !!
The experts said recovery takes about 6 years in a normal environment and up to 18 in a bad one. I would say bottom wont be visible until 2015, just saying