According to a report released this morning by the real estate services firm CBRE, leasing in the Westchester County office market essentially stalled in the second quarter of the year due to the effects of the Covid-19 pandemic.
New lease activity was 38.7% below the five-year quarterly average. The slow pace of leasing in the first quarter of the year carried over to the second quarter of the year with only 166,870 square feet of new leases signed in the quarter.
Renewal activity accounted for 34% of the second quarter’s total leasing velocity of 253,174 square feet, which included new leases and renewals.
A positive note from the point of view of landlords was that the average asking rent for office space in the county during the second quarter was stable when compared with the first quarter at $29.06 per square foot and up 3.2% from what was recorded in the second quarter of 2019.
William V. Cuddy Jr. of CBRE said, “Finance, insurance and real estate tenants accounted for the largest share of leases by square footage in Westchester County during the second quarter of 2020, with CBRE arranging four of the five top transactions. While most of the deals during the quarter were under 5,000 square feet, activity during the second quarter of 2020 skewed heavily toward Class A assets, which accounted for 86.6% of the quarter”™s leasing velocity.”
CBRE said the top lease transactions were: 66,603 square feet subleased by Argus Information & Advisory Services at 50 Main St. in White Plains; 31,718 square feet leased by Sterling National Bank at 360 Hamilton Ave., in White Plains; 19,603 square feet leased by Westchester Visiting Nurse Services at 1311 Mamaroneck Ave. in White Plains; the 11,835 square feet renewal by HDR Inc., at 711 Westchester Ave. in White Plains; and the 10,042 square feet renewal by McCullough, Goldberger & Staudt at 1311 Mamaroneck Ave. in White Plains.
The space availability rate in the county was 18.3%, unchanged from the first quarter of the year, but up slightly from the second quarter of last year. The largest addition to what was available for lease was at 500 Summit Lake Drive in Valhalla where a 58,759-square-foot space came on the market. Valhalla is in the North Westchester submarket where only 9,412 square feet were leased during the second quarter of the year. Asking rents in the North Westchester submarket averaged $26.63 per square foot, essentially unchanged from the same period a year ago and 8.3% lower than the high mark of $29.02 set in the fourth quarter of 2017.
In the South Westchester submarket, average asking rents declined 3.3% to $27.07 in the second quarter of the year. In the East submarket it was $30.20, with $26.57 in the West submarket. In the Central Business District, in and around White Plains, the average asking rent during the second quarter was $35.05 per square foot.
The CBRE report showed that there were 26,433,457 square feet of rentable space located in the Westchester market during the second quarter with 4,842,450 square feet available. There was a vacancy rate of 17.4%.
