STAMFORD, CT - Colliers International Group Inc. (NASDAQ:CIGI, TSX:CIG) on Tuesday released its third-quarter 2017 Office Market Snapshots for Westchester and Fairfield counties. The global commercial real estate services firm’s Stamford-based research team reports that office space availability remained unchanged in Westchester despite healthy leasing activity, while Fairfield County ended the quarter with less available space even though leasing activity was off almost 10 percent.
“After an eventful first half of the year, Westchester County’s office market took a breather in the third quarter, as the availability rate remained unchanged from last quarter at 22 percent,” said Jeffrey Williams, Colliers executive managing director and market leader. “Medical tenants drove activity in the quarter, accounting for seven of the top ten leases.” Overall leasing encompassed 663,142 square feet, with Montefiore’s 281,497-square-foot renewal in Yonkers accounting for 42.4 percent of all leasing in Westchester County. Asking lease rates took a small step backwards, falling 4.3 percent to $26.70 per square foot during the quarter.
· While limited new space became available in the Northern submarket during the third quarter, it was enough to outweigh new deal activity, causing the availability rate to increase 40 basis points to 36.8 percent. CareMount Medical signed the largest lease of the quarter, taking 38,799 square feet at 34 S. Bedford St. in Mount Kisco.
· Aside from Montefiore’s massive 281,497-square-foot renewal at South Westchester Executive Park in Yonkers, the Southern submarket’s activity was muted. The availability rate decreased just 10 basis points but remained the lowest in the county at 12.4 percent. Average asking rent dropped 6.7 percent to $22.43 per square foot but remained 3.8 percent above a year ago.
· The East I-287 submarket continued its transition from the “Platinum Mile” to “Medical Mile” as Greenwich Hospital executed the largest lease of the quarter, 19,897 square feet at 90 S. Ridge St., in Rye Brook. The availability rate remained steady at 17.0 percent, although it was 220 basis points lower than a year ago.
· The West I-287 market’s availability rate was the highest on record for the submarket after rising 20 basis points to 24.2 percent.
· Though it lacked the blockbuster deals of the first two quarters, the White Plains CBD continued its streak of being the star performer in Westchester County. While down slightly from last quarter, asking lease rates of $33.58 were up 3.8 percent year-over-year.
“Despite fiscal turmoil in Hartford, Fairfield County’s office market experienced moderate activity in both supply and demand in the third quarter, although demand outweighed new supply enough to lower the availability rate 70 basis points to 23.8 percent,” said Sean Cullen, director of research for Colliers’ Stamford office. “Leasing activity fell 9.8 percent from a year ago to end the third quarter of 2017 at 705,907 square feet.” Improvement was broad based, with the availability rate dropping in five of the six submarkets. Asking lease rates rose $0.23 per square foot to $36.11.
· The Eastern submarket’s fundamentals remained stable although the asking lease rate decreased 6.4 percent during the third quarter, to $20.82 per square foot, due in large part to the removal of higher-priced space and newly available space that is less expensive.
· Remedy Partners’ lease of just over 40,000 square feet at 800 Connecticut Ave. in Norwalk was the second largest lease in Fairfield County and helped drive down the Central submarket’s availability rate by 130 basis points to 23.8 percent from the all-time high reached last quarter. Despite this deal, total leasing activity fell 21.3 percent below the five-year trailing quarterly average.
· After hitting a minor speedbump in the beginning of the year, Greenwich’s office availability rate dropped for the third consecutive quarter to 20.8 percent causing asking rates to decline slightly to $65.32.
· Stamford’s Non-CBD submarket was the only submarket this quarter that had an increase in its availability rate from last quarter to end September at 25.8 percent. Conversely, Stamford’s CBD shaved 110 basis points from its availability rate of the second quarter, dropping to 31.6 percent. Asking lease rates grew slightly in both submarkets with the CBD improving by 1.3 percent to $45.30 per square foot and the Non-CBD up 0.9 percent to $30.24.
· After increasing for three consecutive quarters, the availability rate reversed course in the Northern submarket and fell slightly, 20 basis points, to 17.6 percent during the third quarter. Asking lease rates grew modestly by 0.7 percent from last quarter to $23.97 per square foot.