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News release

STAMFORD, CT

Tenants New to Westchester County Drive Office Leasing Activity

More than 60% of office transactions at midyear 2016 were signed by businesses new to area


Stamford, Conn., September 1, 2016 — According to JLL research, more than 60 percent of the office leasing activity that occurred in Westchester County in the second quarter of 2016 came from new tenants. Furthermore, out of the 220,209 square feet in transactions completed this quarter, 135,647 square feet in deals were inked by businesses relocating to the county.

 "While sprawling suburban corporate office parks were once in hot demand, tenants with current space requirements are shifting away from this type of workplace, particularly in the in I-287 Corridor," said Chris O'Callaghan, Managing Director and Westchester County market lead for JLL. "As a result, the county's building owners and developers have worked to strategically appeal to today's workforce. Proposals to rezone buildings on Corporate Park Drive, Westchester Avenue and King Street would transform  over 1.1 million square feet of mostly vacant office space into mixed-use developments that could compete with lifestyle destination developments in growing cities across the county."

Tenants in the professional services and insurance sectors were responsible for 54.5 percent of total leasing velocity across Westchester County in the second quarter. Noteworthy transactions include New York State Insurance Fund relocating to 33,894 square feet at 44 South Broadway in White Plains, and Wells Fargo expanding by 22,500 square feet at 40 Main Street, both in the White Plains CBD. In addition, The Regus Group signed for 14,896 square feet at 100 South Bedford Road in Mount Kisko, contributing to the positive absorption the Westchester North submarket recorded this quarter.

Westchester County's overall vacancy rate rose to 22.7 percent in the second quarter of 2016, an increase of 1.3 percent (or 0.3 percentage points) from 22.4 percent the previous quarter. However, the county's Class A vacancy rate dropped to 25.2 percent this quarter, a decrease of less than 1.0 percent from 25.3 percent in the first quarter of 2016.

Average asking rental rates for direct space in Westchester County slipped to $26.96 per square foot in the second quarter of 2016, a decrease of less than 1.0 percent from $27.03 per square foot the previous quarter. The county's Class A rents for direct space fell to $27.85 per square foot, a decrease of 2.8 percent from $28.64 per square foot in the first quarter of 2016.

White Plains CBD

The White Plains CBD submarket recorded approximately 85,000 square feet of leasing activity during the second quarter of 2016. New leases accounted for 75.0 percent of leasing volume within the submarket; the largest transaction in the CBD was New York State Insurance Fund's leasing of nearly 33,900 square feet at 44 South Broadway.

The overall vacancy rate in the White Plains CBD rose to 25.0 percent in the second quarter of 2016, an increase of 4.2 percent (or 1.0 percentage points) from 24.0 percent the previous quarter. The submarket's Class A vacancy rate grew to 26.8 percent this quarter, an increase of 5.1 percent (or 1.3 percentage points) from 25.5 percent in the first quarter of the year.

Overall average asking rents for direct space in the White Plains CBD rose to $30.05 per square foot in the second quarter of 2016, an increase of 3.5 percent from $29.03 per square foot the previous quarter. The submarket's Class A rents for direct space rose to $31.76 per square foot this quarter, an increase of 2.3 percent from $31.06 per square foot in the first quarter of the year.

I-287 Corridor

The I-287 East Corridor accounted for only 18.0 percent of Westchester's leasing activity in the second quarter of 2016. Transactions less than 10,000 square feet in size comprised recent deal velocity.

The I-287 East Corridor witnessed overall vacancy rates decline to 16.0 percent in the second quarter of 2016, a decrease of 4.2 percent (or 0.7 percentage points) from 16.7 percent the previous quarter. Demand for high-end space pulled the I-287 East Corridor Class A vacancy rate down to 16.7 percent this quarter, a decrease of 5.1 percent (or 0.9 percentage points) from 17.6 percent in the first quarter of the year.

The I-287 East Corridor reported the highest rents in the Westchester suburban market at midyear 2016. Overall average asking rents for direct space in the I-287 East Corridor rose to $28.44 per square foot in the second quarter of 2016, an increase of 1.4 percent from $28.06 per square foot the previous quarter. The submarket's Class A rates for direct space grew to $28.11 per square foot this quarter, an increase of less than 1.0 percent from $28.06 per square foot in the first quarter of the year. Class A asking rents have ranged above $28.00 per square foot since the beginning of the year.

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JLL is a leader in the New York tri-state commercial real estate market, with more than 2,300 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2015, the New York tri-state team completed approximately 32.6 million square feet of lease transactions; arranged investment sales, notes, debt and equity transactions valued at more than $8.2 billion; managed projects valued at $7.8 billion; and oversaw a property management, facilities management and agency leasing portfolio exceeding 141 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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $59.1 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.