Cushman & Wakefield luncheon
By ALEX PHILIPPIDIS :: January 11, 2007

More food for thought from C&W luncheon:
Optimism, and a mystery solved

On Tuesday I commented on the prediction that Greenwich rents will zoom to $100 per square foot mark -- one key point made at the Cushman & Wakefield briefing on the office markets in Westchester and Connecticut’s Fairfield counties, held Tuesday.

There were some other points I didn’t get to post as quickly as I would have liked (ah, the crush of production duty on deadline), but they’re still valid a couple of days later, so here goes:

Four reasons to be cheerful

Jim Fagan, a senior managing director with C&W, said the growing tenant demand that is allowing landlords to at last raise rents can be explained by four factors:

Rising employment – Westchester accounts for 80 percent of a three-county region that saw 3,100 jobs created during the year ending last November, according to the state Labor Department. Each job, Fagan said, accounts for 250 square feet of office space demand.
Historically-low interest rates that stayed flat in recent months.

A belief by businesses that top-dollar class A space with plenty of amenities will help them retain employees.

A desire by more businesses to operate in downtowns with easy access to transportation, restaurants, shopping and entertainment.

Rents in downtown White Plains, Fagan noted, have risen by 25 percent over the past 12 months, to between the mid-$30s and even $40 per square foot. I wrote about that trend a few weeks back (Business Journal, Nov. 13, 2006).

“We think 2007 is going to be a very robust year for the office market,” said Fagan, who heads Cushman & Wakefield’s offices in Westchester, Long Island and Connecticut’s Fairfield County.

New York state of mind, yet again

Joseph R. Harbert, chief operating office for Cushman & Wakefield’s metro region, said Manhattan’s rent surge past $100 per square foot will end up drawing many tenant businesses to Westchester and Fairfield counties in search of cheaper rent.

I’m not sure if that’s true. For one thing, Harbert himself said many Manhattan-based businesses have been braving the rent surge due to rising profits, and that should continue into 2007. Perhaps the point could have been, that we’ll see up here smaller companies with fewer employees priced out of Manhattan.

For another, I have heard that before. Remember all the hype just after 9/11 about how all these Manhattan companies were going to march into Westchester and Fairfield counties and lease out any four walls and a floor that could suffice for office space? I sure do. If 9/11 didn’t drive companies away from the Big Apple, and high rents haven’t done so yet, what’s so different this time that will

Mystery solved at 55 Church

For weeks, nay months, Colliers ABR was coy about what big Manhattan law firm was about to take lots of space at 55 Church St. in downtown White Plains

Leave it to C&W to solve the mystery. Its list of four “significant lease transactions” for 2006 named Wachtell Lipton Rosen & Katz as the tenant that inked a deal for 53,500 square feet – two whole floors – at the 100,000-square-foot building.