According to Insignia/ESG figures, the office availability rate for Westchester County at year's end 2002 stood at 15.54% down from the 16.45% level posted a year earlier. Heavy leasing activity in downtown White Plains offset some corporate givebacks in 2002, however the distirct did not lose any ground. The central business district's office availability rate stood at 21.48% at the end of the fourth quarter of 2002, down slightly frrom the 21.77% rate posted at year's end 2001.

Insignia/ESG officials credited the corporate relocation deals in and around White Plains and some flexibility by property owners in response to cheap sublease space coming on the market as catalysts to activity in the county in 2002.

Dean J. Shapiro, executive director of Insignia/ESG's Westchester-Connecticut office, said, "In the current economic climate, flexibility has been critically important to maintaining the health of the county's office market. Clearly, it generated demand in an otherwise lackluster time, and, combined with steady leasing from established Westchester companies, helped reduce the impact of new sublease space and allowed the office market to resist forces that bested efforts in much larger cities."

In particular downtown White Plains and the eastern section of the county were the primary focal points of activity. Insignia/ESG officials noted that the year began with Morgan Stanley's first quarter acquisition of Chevron/Texaco's 725,000-sf headquarters in Harrison. A host of significant commitments in White Plains and the eastern sector generated almost 2.8 million sf of leasing for the year, 285,150 sf of positive absorption and office availability 6% below the end of last year at 5.2 million square feet.

Shaprio added that, "Cut-rate lease terms and generous incentives in some of the area's most prestigious properties made deal-making highly attractive, especially to companies looking to diversify their occupancies in the wake of Sept. 11."

Average asking rent, however, suffered from the deal making– by year end, rental rates, already among the lowest in the greater New York Region, had fallen another 5% by year's end to $25.37 per square foot. Asking rents in downtown White Plains fell 4% from a year ago to $26.27 per sf at the end of 2002.

While the county's office leasing activity was dominated by internal expansion deals, Westchester did see its share of corporate relocations or out of county firms setting up branch operations in Westchester. In addition to the Morgan Stanley purchase in Harrison, Skadden, Arps, Slate, Meagher, & Flom, HRH Construction and Commerzbank Aktiengesellschaft all established a presence in the county last year. In total, relocations exploded 177% from 2001 to 977,560 sf in 2002, according to Insignia/ESG figures.