Westchester County”™s commercial office market showed little activity in the third quarter this year, with one real estate agency reporting a 1.3 percent increase and another a slight decrease in the overall vacancy rate from the previous three months. Â
Third-quarter overall rents in the county averaged $31.19 per square foot, according to Cushman & Wakefield Inc., with class A buildings at $31.75 per square foot and class B space at $27.48 per square foot. Newmark Knight Frank in its third-quarter market report said overall rents averaged $29.86 per square foot, with direct leasing at $30.32 per square foot and sublet space at $25.55 per square foot.
John D. Goodkind, managing principal at Newmark Knight Frank”™s Greenwich, Conn., office, said statistical differences in the two reports might be due to differences in what the companies include in their buildings”™ inventory. Newmark Knight Frank, which lists a Westchester office inventory of approximately 26.5 million square feet, does not include buildings under 25,000 square feet, he said. Cushman & Wakefield”™s county inventory includes approximately 28.4 million square feet in 278 buildings.
In the third quarter, “The deals that got done were the deals that were already on the table,” said Glenn P. Walsh, senior director at Cushman & Wakefield. “Activitywise, there wasn”™t much. The volume slowed up. I see the same thing in the fourth quarter.”
Walsh said leasing agents saw more short-term lease renewals, with companies opting to renew for three to five years rather than lock into l0-year leases.
The fundamentals of the Westchester office market, which has been rebuilt on a multitenant base since the ”™90s, remain strong, Walsh noted. “We”™re not heavily filled with financial firms. We don”™t have a ton of the firms that are getting hit by the financial market. We”™re not overly built as a market. We”™re going to have to weather the storm until next year and I think we”™re going to be fine.”
“I think everybody”™s feeling it out,” Walsh said. “I think everybody”™s going to move a little more cautiously for the next few months.” Despite the slowdown in leasing activity, “I think Westchester is going to look pretty good in the end-of-the-year statistics,” he said.
Cushman & Wakefield Inc. reported a 15.7 percent third-quarter vacancy rate for class A and class B buildings combined, compared to 14.4 percent for the second quarter and 14.7 percent for the third quarter last year. Vacancies for class A buildings stood at 18.3 percent”™s of the county”™s approximately 21.4 million square feet of prime office space, compared to 16.7 percent in the second quarter and 17 percent in the third quarter of 2007. Of the county”™s approximately 6.95 million square feet of Class B space inventoried by Cushman & Wakefield, 7.5 percent was vacant, the same as the third quarter a year ago and 0.1 percent higher than the second quarter this year.
Third-quarter overall vacancy rates by county submarkets as reported by Cushman & Wakefield, compared to the third quarter of 2007, are:
Ӣ White Plains central business district, 13.1 percent, down from 13.6 percent;
Ӣ White Plains noncentral business district, 23.4 percent, down from 23.5 percent;
Ӣ Northern Westchester, 12.9 percent, down from 14 percent;
Ӣ Central Westchester, 13.7 percent, down from 16 percent;
Ӣ Eastern Westchester, 17.5 percent, up from 12.1 percent; and
Ӣ Southern, 11.2 percent, up from 5.6 percent.
Newmark Knight Frank reported an 11.8 percent overall vacancy rate in the county for the third quarter, down from 12.1 percent in the second quarter and up from 11.4 percent in the third quarter last year. The third-quarter average asking rental rate was up $1.08 per square foot from last year, according to Newmark Knight Frank.
“It”™s as expected,” Goodkind said of the third-quarter Westchester market. “I don”™t think there was anything that bad or that good. That”™s a win situation in this environment.”
 “Everything is sort of lagging. It”™s keeping pace with the general economy in that things are very lateral right now.”
As for the fourth quarter, “I don”™t even want to predict,” Goodkind said. “There are a couple large deals out there” of 300,000 square feet. “Let”™s hope they get made.”
Walsh indicated he has worked exclusively on one such deal in recent months.    Â
