Tomasulo: Market Hit Ebb Tide, Westchester Held Status Quo

TARRYTOWN, NY-Saying that the market has reached an ebb tide, CB Richard Ellis senior vice president Frank Tomasulo tells GlobeSt.com that the market has been able to maintain the status quo despite a slowdown in leasing activity recently. “There is definitely less velocity in the marketplace with demand off from its record highs in the year 2000 and rents seem to be stabilizing,” Tomasulo says.

He notes that recent second quarter statistics indicate Westchester County’s office vacancy rate rose slightly to 11%, up from 10.9% at the end of the first quarter. He continues that the current rate is 40% lower than what the rate of empty space in Westchester County was just two years ago.

“In spite of Westchester County’s office market being relatively flat compared to the record activity of last year, it continues to be an increasingly attractive alternative for space when compared to the even tighter market conditions and higher rents in neighboring New York City and Fairfield County,” he says. “Westchester County’s average asking lease rate of $26.55 per sf can be favorably compared to similar space available in Fairfield County and New York City ranging from $40 to $85 per sf.”

Tomasulo also pointed to a number of recent lease deals as a sign that the market contnues to attract large users. For example, he notes the MetLife lease of 55,000 sf at 445 Hamilton Ave.; Trigen Energy Corp.’s expansion into 37,000 sf at 3 Barker Ave. in White Plains; Petals taking 35,000 sf at 155 White Plains Rd. in Tarrytown; Austin Nichols and Company leasing 31,500 sf at 777 Westchester Ave.; Bernard Harris Publishing taking 30,000 sf at 2500 Westchester Ave.; and Verizon leasing 31,000 sf at 2975 Westchester Ave. in Purchase as prime examples.

He adds that the county has not seen any new office construction thus far in 2001, despite a number of developers who stand ready to break ground if they could secure adequate tenancy to do so.

Tomasulo relates that the major blocks of space in the marketplace, which were previously occupied by corporate users continue to supply the lion’s share of the inventory of Class A office space, as opposed to new development. Some of those properties include former IBM buildings in White Plains, Mount Pleasant and Rye Brook, as well as the former Kraft property at 333 Westchester Ave., in White Plains. Also expected to come on line soon will be additional space at the Texaco headquarters in Harrison due to its pending merger deal with Chevron.

Tomasulo concludes, “The office market in Westchester County over the last 20 years has matured, significantly. It continues to ebb and flow. Right now we are in a bit of an ebb tide and we anticipate that the focus on the demand side will increase over the next several quarters.”