Commercial office brokers described first-quarter leasing activity and interest from prospective tenants as weak or “somewhat lackluster” in Westchester County”™s office market.
Expansion in the education and health care sectors continued at the start of this year, according to brokers at Jones Lang LaSalle Inc. But neither industry has yet made a measurable impact on reducing the glut of available office space on the market, according to JLL.
CBRE Group Inc. said the county”™s availability rate stood at nearly 18.6 percent of Westchester”™s total office inventory at the end of the first quarter, up slightly from last year”™s level of about 18.4 percent.
CBRE reported that first-quarter lease deals reduced the county”™s overall available office space at the start of the second quarter by 38,739 square feet. The White Plains central business district led the county with 49,800 square feet of positive net absorption, according to CBRE.
Jones Lang LaSalle said 306,870 square feet of office space was leased in the first quarter, slightly more than half the volume of deals completed in the first quarter of 2013.
“Leasing velocity in Westchester County has consistently retracted over the past year, and the first quarter of 2014 proved to be no different, giving market watchers little reason to expect a rebound in transaction activity in the short term,” according to JLL.
MBIA Inc.”™s lease for 85,000 square feet at The Centre at Purchase, signed in the first quarter, was the largest new lease in the county since 2013, according to JLL (See related story, p. 8). But MBIA”™s plans to relocate its headquarters this year to Purchase could leave vacant its current headquarters property at 113 King St. in Armonk and negatively affect the office market there.
JLL said overall rents in the county rose $26.43 per square foot in the first quarter, a 1.3 percent increase from one year earlier. The brokerage attributed the slight increase to building owners becoming “more bullish” about the market at the start of this year.
JLL said rents in class A office buildings rose to $27.37 per square foot in the first quarter, a 1.7 percent increase from the first quarter of 2013.
