Office Availability Rates Rise in Westchester and Fairfield

STAMFORD, CT-Insignia/ESG reports that office availability rates rose in most markets in Westchester and Fairfield counties in the third quarter.

According to statistics provided to Globest.com, Westchester County’s office availability rate shot up from 13.2% in the second quarter of this year to 14.6% at the end of the third quarter. The countywide office availability rate in Fairfield County now stands at 12.8%, a slight increase from the 12.6% rate posted three months ago.

Michael Siegel, executive managing director of Insignia/ESG, notes that the figures should be taken in their proper perspective. “In the last three years it has been a real estate feeding frenzy here.” He adds that buildings previously hard-pressed to pull in tenants started leasing up and companies were aggressively looking to secure space for future expansion.

“Now, I think the market has settled down,” he said. Siegel adds that companies may have overestimated their expansion needs and are now realizing that they may not need all the office space they once thought would be necessary in the future.

According to Insignia/ESG statistics, the office availability rate in downtown White Plains rose from 18.9% at the end of June to 21.14% at the end of the third quarter. The office availability rate in Stamford now stands at 11.5%, down from 12.9% three months ago.

Asking rents in Westchester County averaged $26.42 per sf at the end of the third quarter, a slight rise from the $26.27 per sf rate posted at the end of the second quarter. In Fairfield County, average asking rents fell sharply from $32.49 per sf at the end of the third quarter to $30.78 as of September 30.

The most expensive office market in the Westchester/Fairfield region is Fairfield West, which consists of Greenwich, Old Greenwich, Darien, New Canaan, Norwalk, Rowayton and Wilton. The average rent there stands at $36.19 per sf, down slightly from $36.41 per sf posted three months ago. The average asking rent in Stamford stands at $32.36 per sf. In White Plains, asking rents are $27.25 per sf.

Siegel says that the suburban office markets went into the “summer doldrums” earlier than normal this year, as the months of July and August were slow in terms of activity.

He says it is too early to tell what impact the terrorist attacks will have on the commercial office markets in Westchester and Connecticut. While phones were ringing at many commercial brokerage firms in the northern suburbs several days after the attacks, Siegel notes that most calls were related to requests for information on space availabilities and infrastructure issues and few were actual clients looking to secure lease deals.

While the industry expectation may have been that a host of New York City firms were going to quickly secure space in Westchester and Fairfield, most of the transactions outside of the city have been based in New Jersey.

“I think privately people were expecting an onslaught of activity in Connecticut and Westchester and clearly the onslaught took place in New Jersey,” Siegel says. In the future, he notes that the market may benefit from smaller New York City-based companies who may have been “on the fence” about a move to the suburbs prior to September 11, who in the months ahead will begin to once again focus on whether they should house their operations outside of New York City.

Siegel concludes that although the commercial office markets in Westchester and Fairfield are not performing at the pace they once were in early 2001, he has noticed a pickup in activity since the terrorist actions of September 11.