Westchester County vacancy rate dips

Real Estate Weekly, June 5, 2002

Westchester County saw its overall vacancy, rate. dip from 17.3% in the previous quarter to 16.6% for the first quarter of 2002. On the average, overall vacancy rates throughout the county remained stable compared to rates from the fourth quarter of 2001, according to statistics compiled by the Research Con suiting Services Group of Cushman & Wakefield of Connecticut, Inc.

Mirroring the national and regional economies, the Westchester County real estate market is showing signs of emerging from a post- Sept. 11 slowdown, Cushman & Wakefield officials said, and space given back by tenants in late 2001 and early 2002 will find new occupants as 2002. progresses. Notable transaction that occurred during the first quarter included:

* 31,884 SF at Reckson Executive Park in Rye Brook to Compass Group USA

* 18,000 SF at 120 Bloomingdale Road in White Plains by Byram Healthcare.

"The real story of the first quarter will be told later this year," said Kenneth M. Krasnow regional managing director of Cushman & Wakefield. "During the first quarter, we saw a surge in smaller tenant activity 10,000 SF and below, which indicates that Westchester County activity is picking up."

Total inventory of 30,337,854 SF during the first quarter of 2002 reflected a modest 1% increase over the first quarter of 2001. During the quarter, several tenants placed space back in the marketplace, particularly in White Plains, where Alliance Capital returned 21,000 SF at 925 Westchester Ave. and Evergreen Financial, a unit of First Union, returned 42,000 SF at Parker Corporate Center, 1311 Mamaroneck Ave.

The eastern submarket (Hartsdale, Harrison, Larchmont, Mamaroneck, Portchester, Rye, Purchase, Rye Brook and Scarsdale) witnessed the largest decline in the vacancy rate compared to the fourth quarter of 2001, dropping from 16.8 to 9.6% in the opening quarter of 2002. However, the average vacancy rate of 16.6% for all Westchester County markets trail the levels recorded for the first quarter of 2001, when the average totaled 13.7%.

"Westchester County has the ability to attract companies from Manhattan and from lower Fairfield County alike," said Krasnow. "We're already seeing some of that relocation taking place. That trend should continue during the second quarter and throughout the year."

The Westchester County full service direct average. asking rental rate of $29.42 has remained unchanged from the previous quarter and is a marked increase over the first quarter 2001 average rate of $27.70. Of all markets comprising the region, the White Plains non-central business district posted the highest direct asking rental rate with a Class A rate of $31.13, up from $30.37 in the corresponding quarter of 2001.

The largest year-to-year increase was recorded in the Southern market (Mt. Vernon, Pelham, New Rochelle, Yonkers) market, where direct average rentals jumped to $23.36 per SF, a boost of $3.02 over the first quarter 2001 average of $20.34. In the Northern market (Armonk, Briarcliff, Ossining, Mt. Kisco, Pleasantville, Somers, Yorktown, Millwood, Peekskill, Bedford Hills), the direct average rental rate experienced a 16-cent decrease, falling from $27.60 in 1st quarter of 2001 to $27.44 in the 1st quarter of 2002.