WHITE PLAINS, NY—While small-to-medium sized lease transactions fueled the Fairfield County, CT office market in the second quarter, one large lease deal here by PepsiCo had a major influence on Westchester County, NY's office market during that period.

CBRE reports that both Westchester and Fairfield saw improving conditions in some key market metrics. Westchester County's office availability rate rose by 24 basis points from the first quarter and stood at 21.2% countywide at the end of the second quarter. Fairfield County's office availability rate dipped from the 21.1% rate at the end of the first quarter to 20.8% at the end of the second quarter.

“What we saw for the second quarter of 2015 was the impact of small and mid-sized tenants, as well as how a single, large transaction can skew results,” states Robert Caruso, senior managing director of CBRE's Westchester/Fairfield County operations. “Fairfield County was influenced by those mid-sized tenants, and Westchester County by many small-sized tenants and PepsiCo's transaction in White Plains. We believe there is reason to be optimistic about the second half of 2015 in both counties.”

In Westchester County, fundamentals remained restrained for the quarter CBRE's data shows, however there was momentum in several areas. Small-sized transactions in the county—those under 10,000 square feet—accounted for more than 60% of the leasing activity over the second quarter of 2015. Local tenant movement also demonstrated momentum over the quarter.

Overall leasing activity in Westchester County rose sharply in the second quarter of 2015 as a result of PepsiCo's 361,181-square-foot relocation of its operations from Somers to 1111/1129 Westchester Ave. in White Plains. This, the largest transaction in the county over the course of the second quarter, helped fuel a rise in activity to 594,502 square feet from the previous quarter, accounting for 61% of activity. With 586,053 square feet of negative net absorption recorded in first quarter of 2015, the PepsiCo deal was still not enough to generate positive absorption for the second quarter. The county ended the first half of 2015 with 654,461 square feet of negative net absorption, CBRE states.

Financial, accounting and information services tenants made up some of the top transactions for Westchester County over the course of the quarter, including Compass Group's 25,927 square feet at 2 International Drive in Rye Brook, Marks Paneth's 19,939 square feet at 4 Manhattanville Road in Purchase and Sqad Inc.'s 12,563 square feet in Tarrytown.

Fairfield County enjoyed a 30% increase in mid-sized tenant activity—those occupying space ranging from 10,000 to 50,000 square feet—in the second quarter.

The overall pace for the quarter resulted in 721,141 square feet leased, down from 887,414 square feet the previous quarter. However, the year-to-date volume at the end of June of this year was virtually unchanged from the 1.6 million square feet recorded at the end of the second quarter of 2014.

Stamford's CBD and Central Fairfield County's submarkets drove leasing during the quarter, with leasing in those areas totaling 287,707 square feet and 161,148 square feet, respectively. UBS' 119,216 square foot lease at 600 Washington Blvd. in Stamford was the county's largest lease transaction for the quarter.

Average asking rents in both markets fell slightly as compared to three months earlier. In Westchester County, the average asking rent at the end of the second quarter was $27.15-per-square-foot, down from the $27.26 rate three months earlier. Fairfield County's average asking office rent was $35.19-per-square-foot at the end of the second quarter. At the end of the first quarter of this year, countywide asking rents stood at $35.63-per-square-foot.