Brokers Predict Another Good Year for Westchester

The panel consisted of Christopher O'Callaghan, senior vice president of Albert B. Ashforth of Stamford, CT; Alan Mounty, director of leasing of Vornado Realty Trust of Paramus, NJ; William Cuddy, senior vice president of CB Richard Ellis of Stamford; and Glenn Walsh, senior director of Cushman & Wakefield of Stamford.

Walsh said the commercial office market saw strong leasing demand in 2004. The impediment to substantial inroads being made in reducing the county's office vacancy rate this past year was the addition of some large blocks of space to the market--specifically the Altria building and the Reader's Digest headquarters, he noted at the roundtable session held at the Board of Realtors offices in White Plains in mid-December.

"There were a number of large deals that were getting done [in 2004]," Walsh said. "The vacancy rate continues to be steady…and the economy seems to be getting better and better in Westchester County and I think we are going to see a great year next year as well."

O'Callaghan added, "The market is much healthier than it has been in my career this year." He related that the New York City office market is stronger than it has been in years and that should bode well for the county in 2005.

His chief concern for the suburban New York market is the availability of workforce. With unemployment rates in the region at about 4%, he wondered where businesses in Westchester will be able to find qualified workers in the future.

In terms of office rents, CB Richard Ellis' Cuddy said, "I think it is inevitable we are going to have rent pressure this year based on the amount of leasing." Walsh agreed that rental rates will be on the rise in 2005. "Things are getting much tighter," he said. "People are finally figuring out Westchester is the spot to be."

Cuddy added that rents, now in the $24 to $25 per sf at most properties in Westchester, will rise this year as will the price tag for trophy office space in the county, which will increase to more than $30 per sf sometime this year.

Mounty related that the retail market is strong in Westchester County and that will likely continue this year as well. He related that a number of "Mom and Pop" retailers are entering the market. While the "category killers" like Target and Wal-Mart are not in trouble, he anticipates that Toys R Us will continue to struggle in 2005.