FIFTY SHADES OF FAIRCHESTER
|We may not have room here to discuss 50 different trends impacting Westchester and Fairfield, but hey—Paul Simon didn't list all 50 ways to leave your lover, either. However, you'll hear plenty of viewpoints atBisnow’s The Future of Westchester and Fairfield Counties event Tuesday in Rye. (Register now!) Like how Westchester is dealing with aging office buildings: “Many of the issues in leasing velocity and building performance have to do with the stock itself,” says CBRE EVP Bill Cuddy, a panelist, who notes the average age of Class-A and B stock is 34 years old. CBRE has removed 41 office buildings from its tracked inventory since '07—3.8M SF being repurposed for alternate uses (think Memorial Sloan Kettering at 500 Westchester Ave and Fordham University at 400 Westchester Ave) or deemed functionally obsolete.
|Normandy Real Estate principal Justin Krebs, also a panelist, says the progressive nature of White Plains and Harrison is encouraging the landlord to look at repurposing older assets. “We have a couple of buildings and land that we might turn into multifamily, retail, and other mixed-use projects to support our office parks along I-287,” he says. (Normandy owns 1.5M SF in both markets, split between 14 buildings known as The Exchange.) Demand for office space in Westchester has been relatively flat, he says, and this proactive approach is key to driving new tenants.
|In neighboring Fairfield County, landlords close to mass transit benefit from tenants’ desires for convenient commutes and easy accessibility to Manhattan, says panelist and Malkin Properties EVP Jeff Newman. If you have full amenities, even better. For instance, Malkin Properties’ three-building First Stamford Place office complex—one block from the Stamford Transportation Center—
includes everything from dining and conference centers to an on-site car wash (because birds don't care about your business meetings) and discounted access to the adjacent Hilton Stamford Hotel. Plus, with rental rates in the mid-$40s/SF, pricing is attractive versus comparable product in Manhattan or Greenwich, he says. Bonus:Enterprise Zone tax abatements for eligable tenants.
|The number of residential projects moving forward and strong retail are positives for Stamford, says Reckson senior director John Barnes, a panelist whose firm (a division of SL Green) owns 2.2M SF in Westchester and 1.8M SF in Fairfield counties. But office is still recovering: Although the first two quarters of leasing were up over last year, they were still below Stamford’s historical averages, and we’re seeing more inter-market shuffling than new tenants coming to the market. However, rental rates are more stable than in Westchester and may even be improving, he says. The bread and butter are deals 10k SF and under, which are particularly driving Reckson’s Stamford portfolio; the landlord signed eight such deals at 1010 Washington Blvd so far this year.