The Westchester County office market moved forward on two fronts during 2018. The first was a continuation of the positive absorption trend. The second was the continued demolition or repurposing of existing buildings.
We ended 2018 with 160,000 square feet of positive absorption, even though the fourth quarter had more than 130,000 square feet of negative absorption (due primarily to 100,000 square feet of space being returned to the market by Verizon shrinking at The Summit in Valhalla). This was the first time in nine quarters that the county had negative absorption. Down county there are fewer spaces available than there have been in years.
These are good signs for the market. Suburban rental rates are moving up slightly. And we continue to take inventory off the market. In the last decade or so, our multitenant office market has shrunk from about 32 million square feet to about 27.6 million square feet through repurposings and demolition of obsolete office buildings. If we cannot increase demand, decreasing supply will help to keep the market healthy. We are not done yet. Repurposings and demolitions look to continue in 2019. When you consider that our newest office product dates from the mid-’80s, it is clear that many buildings have reached the end of their useful life.