The 7.8-million-square-foot Westchester County community-neighborhood shopping center market was in balance as of the second quarter of 2012, with limited new supply matched by limited demand leading to limited rent increases. Though the vacancy rate fell 40 basis points during the second quarter to 7.8%, the rate was up 20 basis points from a year earlier. Net absorption varies from slightly negative to slightly positive here, while the vacancy rate remains well below the U.S. average. The rate was 7.9% in August, and is forecast at 7.8% at year-end 2012.
The 1.3-million-square-foot retail component of the Ridge Hill mixed-use project in east Yonkers completed construction in August, and is likely to be the last major addition to retail space here for some time. In the community-neighborhood shopping center segment, the 70,500-square-foot first phase of the Premier Plaza neighborhood center completed construction in Tarrytown in August, leaving the 36,400-square-foot The Market At Armonk Square in Armonk under construction. Reis predicts no other community-neighborhood shopping center space will complete construction through 2016, as the vacancy rate is forecast to fall to 5.6% by the end of that year.
Both the average asking rent and the average effective rent for community-neighborhood shopping centers increased 0.1% in the second quarter, to $35.53 psf and $31.97 psf, respectively. Rents were up 0.5% by both measures from a year earlier at mid-year, and each average added a penny by August. Reis predicts a 0.5% increase for each for all of 2012, and although subsequent increases are forecast to be larger, no year through 2016 is expected to see an increase of more than 3.5%.