Westchester Office Market Improves in Q2

Westchester’s office market staged a second-quarter comeback.

Leasing activity from April through June jumped 58 percent compared to the previous quarter, according to CBRE. Still, the total 209,000 square feet of lease deals was down 12 percent from the five-year average for the quarter.

The White Plains central business district was the top performer, recording 72,393 square feet of leasing volume, up 81 percent from a year ago. The volume is slightly higher than the five-year average.

Another good sign was net absorption, which was about 149,000 square feet in the second quarter. That marked the first positive quarterly absorption figure since the fourth quarter of 2019.

The second quarter also saw a modest improvement in the availability rate, which dropped to 22.5 percent, compared to over 23 percent in Q1, according to CBRE. Before the pandemic, the availability rate had finally fallen below 20 percent after developers replaced aging office buildings with medical centers and apartments amid rising demand.

Despite the rough 2020, asking rents have stabilized. The average asking rent was $29.56 a foot last quarter, down just 2 percent from a year ago.

Westchester’s largest transaction in the second quarter was Veterinary Emergency Group’s 41,600-square-foot lease at Argent Ventures’ Westchester One at 44 South Broadway in White Plains.

Deals smaller than 10,000 square feet made up 93 percent of closed transactions during the second quarter, accounting for 146,618 square feet, or 70 percent of leasing activity.