The 30.9-million-square-foot general purpose, multi-tenant Westchester office market remained in the doldrums through mid-year 2012. The vacancy rate for the second quarter was 18.1% according to Reis, up 10 basis points from the prior quarter though down 10 from a year earlier. The rate reached a new high of 18.5% in August. Net absorption for the eight months of 2012 was very close to zero, as it had been in 2011 following two sharply negative years. So the modest amounts of new supply have pushed up vacancy.
Recent completions include a 70,000-square-foot building that completed construction in April off the Sprain Brook Parkway in east Yonkers, and the 168,000-square-foot office component of the Ridge Hill mixed-use redevelopment, another east Yonkers project which completed construction in August. The only space under construction is a medical office building in Greenburgh, Reis does not expect any additional space to complete construction through 2016, allowing vacancy to drift down.
The 0.1% decrease in the average asking rent to $28.51 psf, in the second quarter of 2012, was the tenth worst rent gain among the top Reis markets. The average asking rent edged up a penny to $22.01 psf during the quarter. Rents were essentially flat compared with a year earlier at mid-year, and there was little additional change through August. Reis predicts increases of 0.4% asking and 0.7% effective for all of 2012, slightly above the 2011 levels. Asking rent gains are forecast to remain below 3.0% per year through 2016, with effective rent gains peaking at around 3.5%.
Cushman & Wakefield report a vacancy rate of 18.4%, up 200 basis points from a year earlier, and a direct asking rent of $29.06 psf, down 2.1%, for Westchester.