Westchester County isn't quite like New York City — but clearly it's an important area of office recovery in the Empire State. In fact, demand hasn't been stronger since 2021, with net absorption hitting 103,000 square feet in the second quarter, according to a report by JLL.
"This was driven by increased leasing activity in the suburban submarkets," the brokerage explained.
Speaking of leasing, the category surged by 45 percent from the previous three months to exceed 360,000 square feet. Renewals represented 57 percent of the deals.
"Several major tenants—including M&T Bank, MassMutual, and Jackson Lewis—chose to maintain or moderately expand their footprint through renewals," JLL noted.
"Class A properties in the White Plains CBD continued to generate significant interest, as seen in PURE Insurance's relocation to a 33,402-s.f. space at 1 N Lexington Ave."
Also, total vacancy is now down to 20.8 percent, a 10.3 percent decline from levels seen at the end of last year.
However, headwinds lie ahead for Westchester County, located just to the North of NYC. JLL warns that funding cuts for hospitals and nonprofits could harm office occupancy. Plus, there are concerns about the strength of the broader economy.
But JLL did list some positives as well. Some older office buildings in suburban areas are getting either transformed into multifamily or healthcare facilities. This is projected to decrease inventory in the future. Also, despite the concerns, JLL expects that both asking rents, which averaged $30.83 per square foot in the second quarter, and concessions will remain "stable" in the market. Particularly, "asking rents for premium spaces in White Plains will continue to see moderate upward adjustment."
In Westchester County, no office product was under construction during the second quarter.
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