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WHITE PLAINS-Cushman & Wakefield officials characterize the Westchester County office market as “stable,” despite a 152,500-sf decline in leasing activity. C&W states there was 348,074 sf of leasing activity in the first quarter of 2008, as compared to 507,574 sf in the fourth quarter of 2007, and a shade under 400,000 sf a year ago.

The drop in activity caused the vacancy rate to rise to 15.3% countywide, compared to 14.4% at year’s-end 2007. However, the fourth quarter 2008 rate was down slightly from the 15.6% posted a year ago. Vacancy rates in Downtown White Plains rose a full percentage point in the first quarter from a year earlier to 11.9%. Much of the increase, the report states, is due to vacancies at the Westchester One office building at 44 S. Broadway. The empty space at that property accounts for 50% of the vacancies in the White Plains CBD.

The brokerage firm reports that direct average rents in Downtown White Plains now stand at $34.57 per sf, more than $4 per sf higher than the $30.29 per sf reported at the end of the first quarter of 2007. Countywide, direct average rents at the end of the first quarter averaged $31.40 per sf, up from the $30.02 per sf posted a year earlier.

While the numbers are different, due to different criteria used in their respective studies, Newmark Knight Frank also reports a nearly one-percentage point rise in the office availability rate in Westchester County as compared to three months ago. The firm, which has offices in Greenwich, CT, has the first quarter 2008 availability rate at 12.3% countywide, up from 11.4% at year’s-end 2007 and 12% posted a year ago. Newmark Knight Frank lists the countywide weighted average asking rent at $29.99 per sf, up from $29.30 three months earlier.

“Unlike certain markets across that country that are home to a high percentage of companies in the financial services sector, Westchester County will remain stable due to the assorted mix of businesses based here,” says Jim Fagan, senior managing director and branch manager for Cushman & Wakefield’s Westchester and Fairfield County region. “Despite a national office market slowdown, we see stable pricing for both rental rates and building pricing over the next quarter or so before they start to escalate again. There has been some cooling off, so we are now in a mode of sustainable and more moderate growth.” The brokerage firm expects rental prices to remain stable throughout the year, but tenant concessions are likely to increase.

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