RealShare EXCLUSIVE: Investment Sales Market Sizzles in Westchester

An audience of more than 200 of commercial brokers, developers and investment sales professionals were on hand for the RealShare Westchester conference on Thursday at the Crowne Plaza in White Plains, an event produced by Real Estate Media, publishers of GlobeSt.com, Real Estate New York and Real Estate Forum magazines. All were bullish on the Westchester County commercial office investment sales market for the short term, and none were willing to say when "the party" might be over.

Andrew Merin, vice chairman of Cushman & Wakefield's Capital Markets division, said the Westchester investment sales sector has grown considerably over the past few years. "We have seen investment sales of office buildings go for a little over $100 million in 2003 to about $300 million last year and this year, with deals pending in the market, we are going to go probably over half a billion dollars."

Commenting on why there is such a plethora of Westchester office properties on the market right now, Jeff Dunne, vice chairman of CB Richard Ellis, said, "Prices are at unprecedented levels and some, not all [property owners], want to capitalize on the market." He later said that while property sales prices are near or at record highs, the prices are still below replacement cost. Also fueling the sales market are low interest rates and a tremendous amount of investors looking at properties in Westchester, including sources of foreign and institutional capital.

Anthony E. Malkin, president of W&M Properties, said, "There is a tremendous amount of money in the pipeline." Westchester, which for years had been considered a bedroom community of New York City, "is finally getting the attention it deserves" from the investment community, Malkin noted.

Conference participants agreed that the EastRidge Properties portfolio is expected to receive significant investor interest. Robert Weisz, a principal of RPW Group and who was in the hot seat during the popular "Inside the Real Estate Mind" segment hosted by Real Estate Media editor-in-chief Michael Desiato, admitted that he is interested in the EastRidge portfolio. But wonders if he will have his company expend the energy to bid on the property since he expects the portfolio to fetch a high price.

A buyer could be identified for the EastRidge portfolio by the middle or latter part of September, according to Cushman & Wakefield officials who are marketing the portfolio. Also expected to receive significant interest is W&M Properties 711 Westchester Ave., which is 98% leased and also on the market for sale. Malkin said that bids on the 120,000-sf property are due on August 22.

Another interesting tidbit culled from the event was Weisz's prediction that his 800 Westchester Ave. property in Rye Brook--the 625,000-sf former Altria Group property--will be 80% leased by year's end and 100 percent leased by the end of the first quarter of 2006. This year the property has seen significant leasing activity and is currently 60% leased.