Westchester County office market in early stages of recovery - Mid-Year Review and Forecast - Industry Overview

W&M Properties is entering the Westchester County market for the first time. We are leading a group of investors in the purchase of 711 Westchester Avenue in suburban White Plains, which is located along the I-287/Platinum Mile between the Hutchinson River/Merritt Parkways, and downtown.

The property offers easy access to I-287 and I-684, and is served by the Westchester County Bee Line and Shuttle Bus system. It is minutes from the White Plains Metro North train station and the newly expanded Westchester County Airport. The Westchester Mall, a new luxury shopping center anchored by Neiman Marcus and Nordstrom's, is less than five minutes from the property.

We will extensively upgrade 711 Westchester, including renovation of common-area corridors, elevator cabs and restrooms, a new fitness center with state-of-the-art exercise equipment and men's and women's locker room facilities, a new tenants-only 1,000 square foot multimedia conference facility for 50 people with telephone and data ports that will enable up to 16 people to communicate with off-site networks, a new loading dock, as well as updating of the building's mechanical, electrical and HVAC systems. New security systems with keycard access will be installed, as will a new fire alarm with strobes and horns in compliance with A.D.A. requirements.

The first-floor lobby will be expanded, renovated and redesigned to become the building's main entrance, complete with a new marquise, and will replace the ground-floor lobby as the main this makes eminent sense, since the first-floor is closer to the bulk of the parking. However, the ground-floor lobby will be renovated as well.

In general, suburban office markets throughout the U.S. offer many investment opportunities. In 1995, for the first time ever, the year-end national suburban office market vacancy rate was lower than the national CBD vacancy rate. The market is definitely improving for multi-tenant Class-A buildings in Westchester County.

Investing in Westchester County makes a lot of sense to us, especially since we own and operate properties in lower Fairfield County and Manhattan. The eastern I-287 corridor is located right in our own backyard, which makes it easy for us to apply the W&M Properties turnkey approach to leasing and operations at 711 Westchester.

In addition, one reason we initially targeted 711 Westchester was because of its location in the White Plains Office Park, which has an excellent leasing history. The other Class-A properties in the park are currently 95 percent occupied.

What's more, tenant layouts from 2,500 square feet and up - for which 711 Westchester is well-suited - are driving the demand in the Westchester market. According to a year-end report distributed by the Edward S. Gordon real estate brokerage firm, 337 of the 431 lease transactions in Westchester in 1995 were for less than 5,000 square feet.

As Class-A space in lower Fairfield County continues to diminish and rental rates continue to increase, local tenants will turn to the Westchester County for its greater selection of space, reasonable rents, and proximity to New York City. And New York City firms in search of the improved quality of life offered by suburban office markets and good rents in close proximity to the city will also choose Westchester County.

We are extremely optimistic about 711 Westchester's future. In a short period of time, we have generated a substantial amount of interest. Proposals are out for a large percentage of the space, and we already have our first lease out for signature, pending the closing date.

JEFFREY H. NEWMAN Group Vice President W&M Properties

COPYRIGHT 1996 Hagedorn Publication
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