We thought the below CoStar article would be of interest to Fairfield and Westchester county office tenants.

While there is a high vacancy rate (in the ±22% range) for this two county region, particular sub-markets and buildings are experiencing low vacancies and stable rental rates. We have been successfully negotiating renewal and relocation transactions that contain generous amounts of free rent and tenant improvement dollars funded by the landlord, “as well as” below market rents.

Office Market Nears Rent Growth Tipping Point
Positive Absorption, Vacancy Trends Hold up Despite Soft Patch In Economic Recovery

The rebound in office-using jobs is spreading to smaller businesses, which dominated office leasing activity during the first quarter of 2012. The continued positive absorption, coupled with dwindling supply of available space, is setting the stage for resumed rent growth in U.S. markets over the next few years, CoStar Group reported this week in its First-Quarter 2012 Office Review & Outlook.

Though weaker than in recent quarters, office space absorption in the U.S. held steady at 11 million square feet in the first quarter while the national office vacancy rate fell 10 basis points to 12.7%, according to the report presented to CoStar clients by Walter Page, director of research for Property and Portfolio Research (PPR), CoStar’s analytics and forecasting division, and Jay Spivey, CoStar senior director of research and analytics.

While overall job growth has been less than expected, the economy is converting the number of temporary jobs to permanent fulltime jobs at a faster clip and employees are working a greater number of hours on average, trends that bode well for office demand and rent growth over the next three years, the CoStar economists reported. If job forecasts hold up, the unemployment rate will fall to its long term of average of below 6% by 2015.

For the full article please click on the following link: http://www.costar.com/News/Article/Office-Market-Nears-Rent-Growth-Tipping-Point/137927?ref=100&iid=278&cid=D1EEA29DD8CF24E0D5F7AC92B42D73E9

We have tracked the availability of 10,000 square foot (sf) suites within a half a mile of the White Plains Train Station for the past year and have found the market has been stagnant. Since our February 2011 blog, the amount of buildings with a 10,000sf suite has increased from twelve to thirteen and the amount of suites has remained constant at twenty-seven.

The current results are as follows:

The Class A Buildings Are:

• 10 Bank Street
• 150 Grand Street
• 360 Hamilton Avenue
• 1 North Lexington Avenue
• 50 Main Street
• 123 Main Street
• 11 Martine Avenue
• 7 Renaissance Square

The Class B Buildings Are:

• 55 Church Street
• 95 Church Street
• 10 County Center Road
• 170 Hamilton Avenue
• 12 Water Street

The eight Class A buildings have a total of 413,005sf available compared to the same eight buildings in February 2011 that had a total of 393,678sf available. More specifically, the current results show 397,176sf available on a direct basis and 18,114sf on a sublease basis.

The five Class B buildings have a total of 214,406sf available compared to the four buildings in February 2011 that had a total of 199,306sf available. More specifically, the current results show 196,406sf on a direct basis and 18,000sf on a sublease basis.

Bottom-line: If you are looking to renew or relocate your office space within the greater White Plains area, 27 suites in 13 buildings is the type of information you need to leverage your requirement in the market.

Last week we posted an article about economic development in Westchester County. This week we are posting an article written by Laure Aubuchon, Director of Economic Development in Stamford, CT. It should be noted that unlike Westchester, Fairfield County does not have county government, so incentives can be coordinated via economic development departments in larger cities such as Stamford and Norwalk on a local and state level.

From low-cost loans, to tax credits for new jobs, to grants, Connecticut is “open for business” and ready to craft an incentive package tailored to a companies particular needs/situation.

Location is never just about incentives
By Laure C. Aubuchon

I am on my “second tour of duty” with regards to municipal economic development – first with the Economic Development Corp. of New York City and now with the city of Stamford.

These positions give me a perspective from both sides of the state borders. Whether during my time in New York City or here in Stamford, I have never found that there is one reason why a company selects a location over another.

No fiscally sound company makes a choice solely on incentives. Can incentives provide a “tipping point” in the decision process or allow a new company to reach profitability sooner? Yes, and those are the best uses for incentives.

Since I have been in Stamford we have seen major corporate moves with and without incentives, three from New York, three from Connecticut and one from California.

Please click on the following link to read more: http://issuu.com/inscoopmediaproductions/docs/fair_032612?mode=window&pageNumber=1

For the next two weeks, we are posting articles written by directors of economic development. This week’s article, which appeared in the March 26, 2012 edition of the Westchester and Fairfield County Business Journals, was written by Laurence Gottlieb of the Westchester County Office of Economic Development.

Choyce Peterson represents companies looking to lease space in Westchester and Fairfield counties. Coordinating economic development incentives is one aspect of the tenant representation real estate services we provide. Having represented companies in this region for over 24 years, we can report that there is now a profound pro-business climate in the economic development departments of Westchester County, as well as in the New York and Connecticut state offices.

Recently we coordinated benefits on behalf of several area companies that exceeded their expectations and included grants, low interest loans and tax exemptions on purchases of equipment and furniture.

And now on to the first article …

The Seeds of Rivalry
By Laurence Gottlieb

Many people connect “The buck stops here” with President Truman. As Westchester County’s director of economic development, I am quite familiar with another Truman quote, “The seeds of ware are planted by economic rivalry”.

Rivalries are everywhere, whether between nations, Mets and Yankees fans or college student on college campuses. On the economic front, there is the ultimate regional rivalry, Westchester County versus Fairfield County – in many ways, two similar counties. According to the U.S. Census Bureau, both have:

• Populations of more than 900,000 residents;
• Family household incomes of roughly $79,000 and;
• An abundance of intellectual capital.

Westchester and Fairfield are their respective state epicenters for smart people, with approximately 44 percent of residents age 25 and older holding at least a bachelor’s degree.

Please click on the following link to read more: http://issuu.com/inscoopmediaproductions/docs/fair_032612?mode=window&pageNumber=1

As you can see from the below article in this weeks Advocate, while Fairfield County’s vacancy rate is rising, so are rents – sort of an oxymoron going on here. We have highlighted Choyce Peterson’s below quotes and know from experience that this office market continues to present tenants with terrific opportunities to lock-in short and long-term lease positions.

April 17, 2012
Office rent increases; vacancy rate does too
By Richard Lee, Staff Writer

The statistics may slightly vary, but the message is still the same — Fairfield County’s commercial real estate market continues to languish, though there are some reasons for optimism.

The Stamford offices of Jones Lang LaSalle and Cushman & Wakefield both said in their first quarter reports that Class A asking rents have increased, but Class A vacancy rates also rose in the quarter.

Jones Lang LaSalle reported that Class A rents rose from $35.82 per square foot in the fourth quarter of 2011 to $37.55 in the first quarter of 2012 — signaling landlords’ improving confidence in the economy, while Cushman & Wakefield reported that Class A rents grew from $35.74 per square foot in the first quarter of 2011 to the current level of $36.57.

Rents are rising despite an increase in Class A office vacancies in the county.

Despite the increase in rental charges, it is still a tenant’s market, said John Hannigan, a principal in Choyce Peterson, a Stamford-based firm that represents tenants in their search for space.

“The vacancy rate still provides numerous options for tenants to relocate or renew,” he said. “There are still generous concessions in the form of rental rates lower than asked, free rent (for a short period) and tenant improvement dollars provided by landlords.”

For the rest of the article, please follow the following link: http://www.stamfordadvocate.com/news/article/Office-rent-increases-vacancy-rate-does-too-3489139.php%22%3E

This week we thought we’d take a look at the national office market, and have included excerpts from the below CoStar Article.

As a reminder, Choyce Peterson, Inc. has for 15 years worked on behalf of area companies with respect to their office space needs across the country.

Balancing Act: Lack of New Commercial Space Overcomes Softening Demand
Though Pace of Recovery Slowed Over First Three Months of the Year, Absorption Remained Positive

Commercial real estate demand softened during the first quarter of 2012, but not enough to throw absorption off its pace of eight straight quarters of gains. The numbers were aided by little if any meaningful new construction coming online, resulting in declining vacancy rates.

Although rising energy prices and fiscal debt issues for both domestic and foreign governments remain as clouds on the horizon, the U.S. commerical real estate market remained firmly in recovery mode, led by the office and warehouse sectors, according to Walter Page, director of research for CoStar’s Property and Portfolio Research division.

CoStar’s national market research for the first quarter of 2012 showed that, while net absorption slowed slightly compared to the last half of 2011, rent trends generally improved from prior quarters, with the supply-demand balance supported by a lack of new space being added to the market.

“We may not be out of the woods just yet, but the data we’ve compiled for the first quarter certainly demonstrates an ongoing recovery and points towards future growth,” Page said. “While the retail recovery was less pronounced than in the office and warehouse sectors, we’re witnessing positive net absorption across the board.”

For the full article, click on the following link: http://www.costar.com/News/Article/Balancing-Act-Lack-of-New-Commercial-Space-Overcomes-Softening-Demand/137469

We continue to track the availability of 10,000sf suites along Westchester Avenue, East of Downtown White Plains, as we have done throughout 2011. There are 20 Class A & B office buildings, which is four less than in our February, 2011 blog post.

The results are as follows:

The buildings are listed below, and contain a total of 4,309,698sf:

Purchase:
- 2500 Westchester Avenue
Rye Brook::
- 800 Westchester Avenue
White Plains::
- 103 Corporate Park Drive
- 105 Corporate Park Drive
- 106 Corporate Park Drive
- 108 Corporate Park Drive
- 2 Gannett Drive
- 3 Gannett Drive
- 4 Gannett Drive
- 70 W Read Oak Lane
- 333 Westchester Avenue
- 701 Westchester Avenue
- 707 Westchester Avenue
- 709 Westchester Avenue
- 711 Westchester Avenue
- 925 Westchester Avenue
- 1025 Westchester Avenue
- 1111 Westchester Avenue
- 1129 Westchester Avenue
- 1133 Westchester Avenue

When compared to our February, 2011 blog post the following buildings with 10,000sf suites were:

Added:                                            Dropped:
2 Gannett Drive, White Plains             287 Bowman Avenue, Purchase
                                                     2700 Westchester Avenue, Purchase
                                                     2975 Westchester Avenue, Purchase
                                                     104 Corporate Park Drive, White Plains
                                                     777 Westchester Avenue, White Plains

The total square footage of available space has decreased by 244,350sf, from 1,789,435sf to 1,545,085sf when compared to February, 2011. The available space represents 40.5% of the total square footage of these 20 buildings, which is 1.5% less than February, 2011. More specifically, there is 1,154,793sf of direct space available (74% of the total available space) and 390,292sf of sublease space available (26% of the total available space).

Stunningly, there are still 48 suites of 10,000sf or greater available in this region. On a positive note, there are four fewer suites available now than in February, 2011, which equates to a 7.7% decrease.

We surveyed Class A and B buildings within one mile of the Merritt Parkway (Greenwich through Norwalk) to determine how many had 10,000 square-feet (sf) suites available, and found that 21 buildings met this criteria with a total of 3,917,412sf (Class A: 2,863,303sf and Class B: 1,054,109sf).

The number of suites by Class is:

Greenwich/Armonk/Rye Brook/White Plains:

There are now a total of seven buildings with at least one 10,000sf suite available, compared to six buildings in our May, 2011 blog post. The current total square footage available is 375,151sf, as compared to 338,266sf in May, 2011. The 375,151sf is compromised of 283,173sf of direct space (compared to 255,227sf in May) and 91,978sf of sublease space (compared to 90,775sf in May).

The buildings are:
• 1 American Lane – Greenwich American Center, Greenwich
• 1 American Lane – Executive Building, Greenwich
• 10 Glenville Street, Greenwich
• 113 King Street, Armonk
• 900 King Street, Rye Brook
• 1 New King Street, White Plains
• 200 Pemberwick Road, Greenwich

Stamford:

There are now a total of four buildings with at least one 10,000sf suite available, compared to two buildings in our May, 2011 blog post. The current total square footage available is 218,906sf, and is entirely comprised of direct space (compared to 157,147sf in May, 2011), as there is no sublease space available.

The buildings are:
• 30 Buxton Farms Road
• 1 High Ridge Park
• 5 High Ridge Park
• 969 High Ridge Road

Norwalk:

There are now a total of ten buildings with at least one 10,000sf suite available, compared to eight buildings in our May, 2011 blog post. The current total square footage available is 882,318sf, as compared to 821,387sf in May, 2011. The 882,318sf is compromised of 791,381sf of direct space (compared to 658,777sf in May) and 90,937sf of sublease space (compared to 162,610sf in May).

The buildings are:
• 20 Glover Avenue
• 150 Glover Avenue
• 166 Glover Avenue
• 383 Main Avenue
• 901 Main Avenue
• 101 Merritt 7
• 301 Merritt 7
• 401 Merritt 7
• 501 Merritt 7
• 26 Pearl Street

Summary:

It should be noted that in all three locations the available square footage increased as compared to May, 2011. The total increase is 12.12%, a significant upward trend in availability.

There are 10 Class A & B office buildings in Westchester County within 2 miles of the Tappen Zee Bridge with at least one available 10,000 square-foot (sf) suite. The total size of these buildings is 1,388,005sf.

The results are as follows:

The Class A buildings are:
- 555 Taxter Road, Elmsford
- 565 Taxter Road, Elmsford
- 570 Taxter Road, Elmsford
- 120 White Plains Road, Tarrytown
- 220 White Plains Road, Tarrytown
- 520 White Plains Road, Tarrytown
- 555 White Plains Road, Tarrytown
- 660 White Plains Road, Tarrytown

The Class B buildings are:
- 3 W Main Street, Elmsford
- 33 W Main Street, Elmsford

The total square footage of the eight class A buildings is 1,240,005sf. There is 263,684sf available, broken down as follows: 259,684sf is available on a direct basis (20.9%) and 4,000sf on a sublease basis (0.3%), for a combined vacancy of 21.2%.

The total square footage of the two class B buildings is 98,000sf. There is 48,673sf available on a direct basis (49.6%) and no sublease space available.

This update shows that the same 10 Class A & B office buildings within 9 miles North of Westchester Avenue on the East side of Westchester County have at least one available 10,000sf suite. However, there was an increase in suites from 19 in October of 2011 to 22 now.

The Results are as follows:

The buildings are:
Armonk:
- 99 Business Park Drive
- 113 King Street
Purchase:
- 4 Manhattanville Road
- 100 Manhattanville Road
Rye Brook:
- 1 International Drive
- 2 International Drive
- 4 International Drive
- 6 International Drive
- 900 King Street
White Plains:
- 1 New King Street

The 22 suites represent a total available square footage of 616,322sf compared to 552,632sf in October. Specifically, there is 541,227sf of direct space available compared to 477,537sf, and the 75,095sf of sublease space stays the same as in October 2011.

The significant increase in the available direct space square footage is due to one suite added in Purchase and two in Rye Brook.