Brokers See Westchester Improving, Fairfield Stabilizing in '04

Dean Shapiro, senior managing director of CBRE's Westchester-Fairfield offices, said, "Westchester continues to baffle us," noting that the county's office availability rate has held relatively firm over the past few years despite rather lackluster economic activity nationwide and in the region during that time. At the end of last year, Westchester County, bolstered by major relocations by Morgan Stanley, New York Life Insurance and others, recorded the second lowest office availability rate in its history-–12.89% CBRE reported that the county's overall availability rate jumped to 14.45% at the end of the first quarter of 2004, due primarily to the availability of the Altria Group's nearly 600,000-sf complex in Rye Brook.

Shapiro in his presentation on the suburban office markets to approximately 300 attendees of the event, offered high praise to the redevelopment taking place in White Plains. Noting that it was once viewed as "the poster child of a bad market," he said, "The CBD (Central Business District) continues to astound us with above average leasing activity," Shapiro said.

He noted that Westchester has become a much more diverse tenant market that could see some new construction and the resurgence of mid-sized lease deals (10,000 sf to 50,000 sf) in 2004.

Shapiro is also looking favorably on most markets in Fairfield County, although for the second year in a row Fairfield's office availability rate was higher than Westchester County's. At year's end, Fairfield County's office availability rate stood at 18.24%. After the first three months of 2004, the rate had fallen slightly to 17.45% countywide, according to CBRE figures.

A number of the issues that have plagued the Fairfield County market over the last few years, particularly Stamford and Greenwich, have begun to subside. He noted that the amount of sublease space coming to market as well as corporate merger and acquisition activity have fallen off. In addition, the fallout from the decline of the high-tech/new economy sector, which battered the Norwalk office market, has run its course for the most part.

Shapiro said that the migration of companies from the western sections of Fairfield County to the lower cost eastern markets of Norwalk, Shelton and Trumbull will continue. The migration is being fueled by the need to find affordable housing for workers as well as the traffic congestion that frustrates rush-hour commuters traveling to and from lower Fairfield County.

While he was bullish on office markets in the Shelton/Trumbull area and Norwalk, he said that the Stamford office market, which has a first quarter 2004 office availability rate of 17.09%, could possibly see some large deals this year. He noted that Stamford has a variety of large blocks of space available for lease, while blocks of 100,000 sf or more are hard to come by in competing markets such as Greenwich and across the state line in Westchester.