Real estate services firm CBRE has issued a report that contains some positive data about what happened in the Westchester office market during the third quarter of this year.
Leasing activity, as measured by number of square feet rented, went up by 9% from where it had been in the second quarter of this year.
The average asking rent was $29.53, basically stable when compared with where it was during the second quarter of the year and about 1% higher than it was a year ago.
Space availability remained essentially flat at 5,990,841 square feet, representing 22.7% of the 26,433,457 square feet of rentable area making up the Westchester office market.
According to CBRE, the top three leasing transactions during the third quarter of 2021 were renewals in buildings on Skyline Drive in Hawthorne. TierPoint, which operates data centers, renewed 85,000 square feet at 17 Skyline Drive and 46,078 square feet at 11 Skyline Drive. Warehousing and distribution company Conri Services Inc. renewed 41,511 square feet at 5 Skyline Drive.
Leasing activity in Westchester”™s central business district, which is centered in White Plains, was up 14% over the second quarter, coming in at 82,748 square feet. Asking rents were the highest in the county, averaging $36.39 per square foot.
Asking rents in the western part of the county rose a modest 1.3%, yet set an all-time record for the area at an average of $27.12 per square foot.
Asking rents in the northern part of Westchester dropped by 1.8% to $26.08. Rents being asked in the eastern and southern sections of the county were flat, averaging $36.39 per square foot.
“Year-to-date leasing across all submarkets outpaced their 2020 levels, indicating the market”™s rebound from the Covid pandemic,” CBRE said. “The past two quarters have been vast improvements from prior pandemic-era performance.”
CBRE”™s report on the Westchester office market came a few hours after an analysis of the New York City office market was released by New York State Comptroller Thomas DiNapoli, who said that it will take years for the office market to recover. He said that as of April 2020, only 5% of the approximately 1.6 million office workers in the city had been working on-site.
DiNapoli calculated that the pandemic erased $28.6 billion in market value from the city”™s $172 billion worth of office buildings and the plunge cost the city more than $850 million in property taxes in just the first three quarters of this year.
“When the pandemic hit, companies shifted office workers to remote work, rents fell, and vacancies rose,” DiNapoli said. “I am optimistic for the sector”™s recovery but its short-term future remains uncertain as employers assess future use of the space.”
DiNapoli reported that in the second quarter of 2021, asking rents in the city were down by 4.2% from the same period in 2020 and the office vacancy rate was the highest for the city in 30 years at 18.3%.
