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5 Key Trends That Have Shaped Westchester County

July 1, 2024

As I complete my 38th year as a commercial real estate broker, I have been thinking about some of the key trends that have shaped Westchester County during my time in the business.

1. Repurposing:

About fifteen or so years ago, the repurposing of obsolete buildings in Westchester began. First, it was the Town of Harrison looking for a way to regain the tax ratables that they lost as Lowell Schulman’s oldest office buildings (built in the mid-late 70’s) began to empty out. Tenants moved to (slightly) newer and nicer buildings, and the then-owners of these buildings on Corporate Park Drive relocated most of the remaining tenants into other buildings they owned nearby.

So, a group of six buildings were totally empty with literally no prospects of being re-tenanted. The supermarket chain Wegman’s had been searching for a long time for a site to build a large market to take advantage of Westchester’s affluent demographic. Harrison thought ahead and re-zoned the permitted uses in this area to go well beyond office buildings. A 125,000 square foot Wegman’s and a 5-story apartment building by Toll Brothers replaced the obsolete office buildings. Both have been highly successful and have paid multiples of the real estate taxes to the municipality that the formerly empty office buildings did.

Other new uses in this area included a 210,000 square foot LifeTime Fitness Center replacing an obsolete Gannett printing plant and office building, as well as new medical space and multi-family developments. In addition, some office buildings were totally converted to medical use, beginning with Memorial Sloan-Kettering’s renovation of an old Verizon office building to a state-of-the-art cancer treatment center. As of today, these repurposing efforts have shrunk our office market from about 32 million square feet to about 26.5 million square feet, and no new office space has been built since the mid 1980’s.

2. Growth of Medical:

It is no secret that the large medical groups such as WestMed / Summit, Caremount and others have tremendously expanded their use of space in recent years. In addition, large hospital groups from New York City have moved into Westchester.

New York Presbyterian bought a 380,000 square foot office park in White Plains, and Hospital for Special Surgery leased 50,000 square feet, also in White Plains. WestMed leased a built-to-suit 80,000 square foot building in Purchase. From a real estate point of view, these are all large, well-capitalized tenants that will remain in these locations long-term. And more will follow as our population continues to age.

3. Multi-family:

There is a national shortage of housing, and Westchester is no exception. The cities of New Rochelle, White Plains, Yonkers, and others have been eager for developers to develop in their downtowns and help to increase their populations and provide TOD (Transit Oriented Development) that is walkable to retail, services, restaurants, bars, entertainment, and the Metro-North Stations.

There have been thousands of units already constructed and many thousands are now in construction and in the pipeline. Any cranes you see are building multi-family buildings.

4. Pandemic and Hybrid Work:

People simply have not come back to the office in large enough numbers since the pandemic. Most companies are working 2-3 days in the office and the rest of the week their employees work remotely. This is the way of the future and will not change. It has resulted in many companies closing offices entirely, and many more shrinking in size when their leases expire.

It has also put additional pressure on office building owners, who are faced with increased operating costs and real estate taxes, as well as higher interest rates to refinance their buildings. It has already resulted in a number of Westchester buildings going into financial distress, which inhibits their ability to attract new tenants. This trend will also continue, and we will become a market of the “haves” and the “have nots” where the “haves” can transact new leases and grow their rental income and the “have nots” will see tenants move out and not have the financial wherewithal to replace them.

5. White Plains Galleria:

This auto-centric mall, built in the 1970’s, has been closed and is empty. The development team (a combination of the owner of the mall, its lender and local developer Louis Cappelli) are working on getting approvals for a master plan for this very large site.

This project is expected to take about 10-12 years to complete, and will take what was an ugly, hulking mega-building and transform it into an 8-building development of primarily multi-family buildings with over 46% open space. It will be a combination of green space, restaurants, bars, and entertainment venues. Needless to say, the demolition of the structure and future construction will impact the White Plains CBD for this entire period.

Howard E. Greenberg is President of Howard Properties, Ltd. in Valhalla, New York. He has been a prominent commercial real estate broker for over 37 years and founded his own firm in 1998. He specializes in Tenant Representation and Corporate Services for clients in Westchester and throughout the United States. He can be reached at (914) 997-0300 or at howard@howprop.com

VIDEO: HOWARD GREENBERG INTERVIEWED ON THE CLOSING OF THE GALLERIA MALL