WPCNR DOWNTOWN DAILY. From Cushman & Wakefield. April 11, 2008: Vacancy rates in the White Plains CBD registered at 11.9%, up a full percentage point in the first quarter year over year. Much of the increase was a result of vacancies at Westchester One at 44 S. Broadway, which accounts for 50 percent of the vacancies in the city's business district. Direct average rents last quarter in the White Plains CBD were $34.57 per square foot (psf), significantly higher than $30.29 psf reported a year ago, due to some office properties that are commanding in excess of $40 psf.

The news comes in a report released by Cushman & Wakefield Friday in its first quarter 2008 report for the Westchester County commercial real estate market indicating the market remained stable but slowed in terms of leasing activity, with a slight rise in vacancy rates and negative absorption. Direct average rents were up countywide.

Overall  county vacancy rates totaled more than 4.3 million square feet (msf) or a 15.3% rate, which was up from 14.4% at year-end 2007 and down from 15.6% one year ago.  Class-A overall vacancy rates registered at 17.6%, up from 16.6% at year-end 2007 and down from 17.8% one year ago.

Leasing activity totaled 348,074 sf, down from 507,574 sf last quarter and 395,995 sf same time last year.

Major deals that closed during the first quarter included APS Healthcare which leased 44,082 sf at Westchester One in White Plains; SAC Capital which leased 30,406 sf at 5 International Drive in Rye Brook; and Merrill Lynch which leased 26,131 sf at 2 International Drive in Rye Brook.

Overall absorption totaled negative 399,947 sf, down from positive 66,822 sf last quarter and 44,787 sf same time last year.

“Unlike certain markets across the country that are home to a high percentage of companies in the financial services sector, Westchester County will remain stable due to the assorted mix of businesses based here ,” said Jim Fagan, senior managing director and branch manager for Cushman & Wakefield’s Westchester and Fairfield County region.

Direct average rent countywide was up 4.6% year over year in the first quarter, to $31.40 psf, up from $31.38 psf last quarter and $30.02 psf one year ago.  Class-A rents registered at $31.92 psf, down slightly from $31.96 psf last quarter and up from $31.19 psf one year ago.

Rents are predicted to remain stable throughout the year, but tenant concessions are likely to increase as landlords recognize that opportunities to lease space will be flat. Countywide, the commercial leasing market is expected to slow in comparison to recent years, but activity will remain steady. The national credit crunch significantly slowed the investment sales market in the first quarter, with the number of buildings traded off from a year ago.