Westchester County's leasing velocity continues

Real Estate Weekly, April 19, 2000 by Philip M. Luria

During the first quarter of the New Year, Westchester County saw last year's momentum continue with approximately 450,000 square feet of new leasing activity.

The largest leases to date were with Metromedia Fiber Networks for 80,000 square feet at 360 Hamilton Avenue in White Plains; Nextel for 50,000 square feet at Taxter Corporate Park, Elmsford; In-Site Services for 43,000 square feet at 44 South Broadway, White Plains; and Leukemia Society for 45,000 square feet at Parker Corporate Center, also in White Plains, which was negotiated by Austin Corporate Properties.

With about 2.5 million square feet leased during 1999, its fair to say that there is some longevity to the current momentum. Vacancy rates have decreased to 14.5 percent countywide and 22.5 percent in the White Plains Central Business District.

Asking rentals have climbed by about $1.50 per square-foot over those a year ago to $26.50 per square-foot for Class A space as a countywide average and $21 per square-foot for Class B space.

The White Plains CBD remains the highest priced submarket, with asking rentals of up to $30 per square-foot in the most desirable buildings located near the railroad station.

On the supply side, the most notable availabilities size-wise are (546,000 square-foot) 333 Westchester Avenue, White Plains; (339,000 square-foot) 445 Hamilton Avenue, White Plains; (195,000 square-foot) 900 King Street, Rye Brook; and (383,000 square-foot) Mt. Pleasant Corporate Center.

The Westchester Market, which has had a somewhat negative perception due to relatively high vacancy rates caused by corporate downsizing, is now perceived as a great value relative to Fairfield County and Manhattan, which have little space available and significantly higher prevailing rentals.

The current high level of activity is very diverse both size-wise and from the stand point of types of business, with everything from start-up technology and Internet companies to corporate headquarters seeking space.

Further evidence of market strength and positive perception is the fact that during the last several months, 2.5 million square feet of space was sold in numerous sales transactions totaling about $280 million to various private and institutional investors. Two of the recent and most notable sales were the 525,000 square-foot Gateway building in White Plains to the Alaska State Pension Fund for $70 million and the sale of the 280,000 square-foot 100 Manhattanville Road building to BFG/LaSalle Investment Advisors for $47.5 million.