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News release

Stamford, CT

Jones Lang LaSalle Sees Signs of Stabilization in Westchester County’s Office Market in Third Quarter of 2010

Lack of job growth mutes recovery of Fairfield County’s office market; slight gains in job growth in Westchester County fuels vacancy rate decreases in many office submarkets


STAMFORD, CT, October 20, 2010 — Jones Lang LaSalle announced that the recovery of the Fairfield County, Conn., commercial office market remains muted, while job growth helped stabilize the Westchester County, N.Y., market in the third quarter of 2010. The two counties both saw average asking rental rates decrease in most office submarkets.

Fairfield County

“One of the biggest challenges the Fairfield County office market faced in the third quarter was the persistent threat of the recession worsening,” said Robert Ageloff, international director and head of Jones Lang LaSalle's Stamford office. “That danger, coupled with continued job losses in office-using sectors, suppressed demand for office space, stifling any significant momentum Fairfield County saw during the second quarter of the year.”

The pace at which available space was added to the Fairfield County office submarket appeared to slow in the third quarter of 2010. The county’s Class A vacancy rate remained unchanged this quarter at 22.7 percent. Class B vacancy rates increased to 24.9 percent in the third quarter of 2010, rising 2.0 percent from Class B vacancy rates of 24.4 percent at mid-year 2010.

Fairfield County’s high-end buildings saw rents fall slightly this quarter, while the county’s Class B market posted an increase in rates. Class A rents fell to $35.69 per square foot in the third quarter of 2010, dropping 1.8 percent from Class A rates of $36.35 per square foot at mid-year 2010. Class B rents rose to $21.84 per square foot this quarter, increasing 4.3 percent from Class B rates of $20.93 per square foot the previous quarter.

Leasing activity in Fairfield County totaled more than 1 million square feet for the third quarter of 2010, demonstrating sustained demand compared with the 1 million square feet leased in the second quarter of 2010.

Stamford saw Class A vacancy rates increase to 27.1 percent in the third quarter of 2010, rising 1.5 percent from Class A vacancy rates of 26.7 percent at mid-year 2010. The city’s Class B vacancy rate increased to 26.4 percent this quarter, increasing 3.9 percent from the Class B vacancy rate of 25.4 percent the previous quarter.

Class A rents in Stamford fell to $40.01 per square foot in the third quarter of 2010, dropping 1.3 percent from Class A rates of $40.55 per square foot at mid-year 2010. The city’s Class B rents rose to $22.94 per square foot this quarter, increasing 3.3 percent from Class B rates of $22.20 per square foot the previous quarter.

The Greenwich office market saw vacancy rates rise in all property classes for the second straight quarter. Class A vacancy rates rose to 22.1 percent in the third quarter of 2010, increasing 3.8 percent from Class A vacancy rates of 21.3 percent at mid-year 2010. Class B vacancy rates increased to 21.0 percent this quarter, rising 4.5 percent from Class B vacancy rates of 20.1 percent the previous quarter.

Class A rents in Greenwich fell to $66.36 per square foot in the third quarter of 2010, slipping 1.1 percent from Class A rates of $67.11 per square foot at mid-year 2010. The city’s Class B rates decreased to $50.13 per square foot this quarter, dropping 4.9 percent from Class B rates of $52.73 per square foot the previous quarter.

Westchester County

“The Westchester County job market appeared to stabilize in the third quarter,” said Ageloff. “During August, the local economy added another 500 jobs, putting payrolls almost 1 percent higher than levels seen this past year. This slight gain in office-using employment appeared to drive some demand for office space.”

Leasing activity helped fuel vacancy rate decreases at high-end office buildings in many of Westchester County’s office submarkets. Class A vacancy rates fell to 21.7 percent in the third quarter of 2010, dropping 1.8 percent from the Class A vacancy rate of 22.1 percent at mid-year 2010. Class B vacancy rates rose to 14.1 percent this quarter, increasing 1.4 percent from Class B vacancy rates of 13.9 percent the previous quarter.

Class A average asking rental rates in Westchester County fell slightly to $27.07 per square foot in the third quarter of 2010, dropping 0.7 percent from Class A rates of $27.27 per square foot at mid-year 2010. Class B rents remained unchanged at $22.01 per square foot this quarter.

Westchester County leasing activity totaled slightly more than 300,000 square feet for the third quarter of 2010, bringing year-to-date leasing activity to slightly more than 1 million square feet.

The White Plains CBD saw vacancy rates for high-end buildings fall for the third straight quarter. Class A vacancy rates fell to 19.2 percent in the third quarter of 2010, dropping 2.5 percent from the Class A vacancy rate of 19.7 percent at mid-year 2010. The submarket’s Class B vacancy rate remained unchanged at 19.0 percent this quarter.

Class A rents in the White Plains CBD dropped to $30.88 per square foot in the third quarter of 2010, falling 3.5 percent from $31.99 per square foot at mid-year 2010. Class B rents rose to $23.51 per square foot this quarter, increasing 5.3 percent from Class B rents of $22.33 per square foot the previous quarter.

Office buildings along the I-287 West Corridor saw vacancy rates decrease in all property types this quarter. Class A vacancy rates fell to 20.9 percent in the third quarter of 2010, dropping 1.9 percent from Class A vacancy rates of 21.3 percent at mid-year 2010. Class B vacancy rates slipped to 15.9 percent this quarter, decreasing 1.9 percent from Class B vacancy rates of 16.2 percent the previous quarter.

Class A rents in the I-287 West submarket rose to $24.91 per square foot in the third quarter of 2010, increasing 1.0 percent from Class A rents of $24.66 per square foot at mid-year 2010. Class B rents fell to $20.71 per square foot this quarter, decreasing 0.9 percent from Class B rates of $20.90 per square foot the previous quarter.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2009 global revenue of $2.5 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.6 billion square feet worldwide. In the New York tri-state area, Jones Lang LaSalle provides leasing and management services for more than 94 million square feet of commercial real estate on behalf of owners and occupiers in the region. For further information, please visit our website, www.joneslanglasalle.com.