Westchester West availabilities shrinking to county low

Real Estate Weekly, April 5, 2000

All segments of Westchester County's commercial office market made stunning progress towards eliminating the oversupply of available space last year, including several transactions by Insignia/ESG over the past few months which contributed to a drop in the Westchester West submarket's availability to 10.9 percent - the lowest in the county.

Just one year ago, Westchester West's availability rate stood at 14.5 percent, not the highest, but certainly not the lowest availability of the county's segments. Much of this unoccupied space resided at two major locations: Taxter Corporate Park in Elmsford and 520 White Plains Road in Tarrytown.

Taxter Corporate Park, a 350,000 square-foot Class A office complex, was 67 percent occupied. A series of tenants, including Citiscape, KLM, Discovery Zone and V-Band, had vacated space in the park. 520 White Plains Road, similarly, had 88,428 square feet of availability remaining on the sublease of the former Ciba-Geigy headquarters space. Originally, this amount totaled more than 154,000 square feet of space, but Westcon Inc. leased 66,000 square feet in 1998, leaving the remaining vacancy. Neither site was fielding much interest from potential tenants - Westchester West seemed fated to become yet another of the county's vacancy-heavy submarkets.

One year later, Westchester West's inventory of available space has dropped more than 23 percent, due primarily to the rapid disappearance of unoccupied space in these two buildings. While some of the credit for this turnaround can be traced to transactions completed in early 1999, the bulk of the activity took place over the past few months. During that time, almost 170,000 square feet of leases were consummated at Taxter Corporate Park and 60,000 square feet at 520 White Plains Road. Another 29,500 square-foot floor at 520 White Plains Road was recaptured by the building's owner, Reckson Associates. As exclusive leasing agent for both these properties, Insignia/ESG was responsible for the successful disposition of the spaces.

At Taxter Corporate Park, Insignia/ESG's Michael Siegel and David Block arranged new leases for Nextel of New York, Inc. and Nationwide Mutual Insurance Co. Nextel, which plans to use the Taxter space to accommodate new growth, leased 50,174 square feet on the third and fourth floors of the 565 Taxter Road building. Nationwide Mutual Insurance will consolidate two Westchester locations into its new 16,100 square feet on the second floor at 565 Taxter Road. And, in the largest recent transaction in the complex, Fuji Photo Film USA renewed its 103,000 square-foot lease at 555 Taxter Road. All three of these transactions are particularly notable as they were large leases in what is increasingly a small tenant's market.

On average, Westchester deals total just over 7,200 square feet each. Insignia/ESG was retained as exclusive leasing agent for the complex just over a year ago. During the span of its assignment, the firm has also leased 6,686 square feet to LCC International and 6,800 square feet to Allied Domecq Spirits & Wines at 565 Taxter Road.

520 White Plains Road also saw large leases claim the bulk of its available space. Rapidly growing Westcon Inc. expanded its occupancy in the building by another floor. The company now occupies more than 95,000 square feet at 520 White Plains Road. Additionally, Liberty Mutual Insurance leased 29,000 square feet on the sixth floor of the building. The insurance company will consolidate several locations to the new address. Insignia/ESG's Hilarie Siles and Paul Jacobs, exclusive sublease agents for Ciba-Geigy's successor company, Novartis Corporation, were responsible for these transactions.

According to Insignia/ESG's David Block, "The recent success of the Westchester West submarket can be attributed to its proximity to the Tappen Zee Bridge and easy access from locations throughout Westchester and Manhattan. More and more people are commuting into Westchester from Rockland County, and Westchester West offers quality office product close to home."

While Insignia/ESG's assignment at 520 White Plains Road has been completed, approximately 33,000 square feet of space remains available at Taxter Corporate Park. The 22,000 square feet on the sixth floor and 11,000 square feet on the second floor offer tremendous views of the Hudson River, ample outdoor parking, underground executive garage space, a fitness/exercise center, on-site cafeteria with catering capabilities, convenience shop and an outdoor picnic area.