Skip Ribbon Commands
Skip to main content

News release

STAMFORD, CT

Westchester County’s I-287 Corridor Claims 65% of Completed Transactions

Tenants sign for 216,295 SF in leases in I-287 East Corridor alone in 3rd Quarter of 2015


STAMFORD, Conn., October 19, 2015 — JLL reported that strong demand from tenants in Westchester County continued in the third quarter of 2015. Although overall activity this quarter slowed compared with the pace at which deals were signed at midyear, the county continued to record a steady drumbeat of completed transactions.

“Westchester County was extremely active in the third quarter, with a few major leases completed and a few not yet announced,” said Chris O’Callaghan, Managing Director and Westchester County market lead for JLL. “Tenant demand began increasing earlier this year, and we expect the trend to continue through the end of 2015 into 2016. Westchester County’s efforts to reposition older commercial office buildings will help tighten the Class A market throughout the area although there will still be a bit of an oversupply.”

While enjoying a surge in tenant activity that began earlier this year, Westchester County recorded a 33.6 percent drop in deal volume in the third quarter of 2015. Tenants signed for 450,916 square feet of space this quarter, a substantial reduction compared with 731,048 square feet at midyear 2015, but not far off from the 488,474 square feet completed in the first quarter of 2015.

Out of the top 10 leases signed this quarter in terms of square footage leased, six were renewals, three were relocations and one was a new lease. There was negative absorption of 241,401 square feet in Westchester County in the third quarter of 2015, a nearly 30 percent improvement from the 343,585 square feet in negative absorption posted at midyear 2015.

Westchester County Industrial Development Agency recently approved a plan to allow sales and mortgage tax exemptions for four major development projects, with the projected value totaling nearly $500 million. The strategy includes offering a tax exemption for the $150 million expansion of Regeneron Pharmaceuticals Inc.’s headquarters in the I-287 West Corridor, as well as $50 million for renovations to the company’s existing space.

The bio-tech/life sciences industry has been a major player in Westchester County since 2007, and the IDA’s incentive package is widely expected to catch the eye of large companies such as Regeneron.

Westchester County’s overall vacancy rate rose to 22.8 percent in the third quarter of 2015, a year-over-year increase of 8.1 percent (or 1.7 percentage points) from 21.1 percent. The county’s Class A vacancy rate grew to 25.6 percent this quarter, a year-over-year increase of 12.3 percent (or 2.8 percentage points) from 22.8 percent.

Year-over-year, overall rents in Westchester County fell to $24.27 per square foot in the third quarter of 2015, a decrease of 5.5 percent from $25.69 per square foot. Year-over-year, the county’s Class A rents dropped to $25.40 per square foot this quarter, a decrease of 4.8 percent from $26.67 per square foot.

White Plains CBD
Although the I-287 Corridor drew the vast majority of interest from tenants, the White Plains CBD claimed slightly less than 14 percent of all leases signed this quarter. The submarket recorded 61,235 square feet in transactions, most of which were for spaces smaller than 10,000 square feet. The steady, ongoing leasing interest from tenants within the county’s Class A market fueled 25,996 square feet in positive absorption in the third quarter of 2015.

Year-over-year, the overall vacancy rate in the White Plains CBD fell to 24.2 percent in the third quarter of 2015, a decrease of 1.2 percent (or 0.3 percentage points) from 24.5 percent. Year-over-year, the submarket’s Class A vacancy rate rose slightly to 24.9 percent this quarter, an increase of less than 1.0 percent (or 0.2 percentage points) from 24.7 percent.

Year-over-year, overall rents in the White Plains CBD fell to $26.98 per square foot in the third quarter of 2015, a decrease of less than 1.0 percent from $27.11 per square foot. Year-over-year, the submarket’s Class A rents rose to $29.21 per square foot this quarter, an increase of 1.2 percent from $28.85 per square foot.

I-287 Corridor
The I-287 Corridor was by far the strongest submarket in Westchester County, accounting for all but one of the seven largest deals signed in the third quarter of 2015. Combined, the I-287 Corridor accounted for about 65 percent of all leasing activity in Westchester County this quarter. With easy access from major highways, the I-287 East Corridor and I-287 West Corridor boast many of the county’s most desirable office assets. More than 75.0 percent of tenants currently looking for office space in Westchester have identified the I-287 Corridor as their preferred location.

AmeriPath Inc. signed the largest lease of the quarter, taking 51,054 square feet at 100 Midland Avenue in Port Chester. Other noteworthy deals along the I-287 Corridor include the Leukemia & Lymphoma Society leasing 41,868 square feet at 3 International Drive in Rye Brook; O'Connor Davies LLP signing for 35,580 square feet at 500 Mamaroneck Avenue in Harrison; and Commerzbank Aktiengesellschaft leasing 31,520 square feet at 6 International Drive in Rye Brook. PepsiCo Inc. recorded the only deal completed in the I-287 West Corridor this quarter, leasing 39,075 square feet at 3 Skyline Drive in Hawthorne.

Strong third-quarter leasing activity helped push down vacancy rates throughout the I-287 East Corridor. Year-over-year, the overall vacancy rate in the I-287 East Corridor fell to 17.2 percent in the third quarter of 2015, a decrease of 9.9 percent (or 1.9 percentage points) from 19.1 percent. Year-over-year, the submarket’s Class A vacancy rate dropped to 17.8 percent this quarter, a decrease of 11.9 percent (or 2.4 percentage points) from 20.2 percent.

Year-over-year, overall rents in the I-287 East Corridor fell to $25.68 per square foot in the third quarter of 2015, a decrease of 2.7 percent from $26.39 per square foot. Year-over-year, the submarket’s Class A rates dropped to $25.91 per square foot this quarter, a decrease of 2.0 percent from $26.43 per square foot.

For more news, videos and research resources from JLL, please visit the firm's U.S. media center Web page. Bookmark it here: http://bit.ly/18P2tkv.

JLL is a leader in the New York tri-state commercial real estate market, with more than 2,000 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2014, the New York tri-state team completed approximately 22.8 million square feet of lease transactions, arranged investment sales transactions valued at more than $5.4 billion, managed projects valued at $7.6 billion, and oversaw a property management, facilities management and agency leasing portfolio exceeding 163 million square feet.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.