It’s the summer doldrums! It always seems to slow down or go on hold around July and August. That’s not all bad, right? We all need to take a breath.
I decided to look at office, retail and industrial/warehouse segments for commercial real estate in Westchester, Putnam and Dutchess Counties.
We see 8 percent vacancy (about 3 million sq. ft.) with 1,528 properties surveyed. 39,902,853 sq. ft. in total with 36,879,262 sq. ft. occupied. Trending shows 4 percent vacancy in 2008 doubling to 8 percent in the current quarter. This is an example of the trend we see in general: manufacturing is a shrinking market both locally and nationally, and we are feeling it more acutely in the Northeast due to increasing costs of being in business relative to other markets. Can’t argue with the data.
A better story which is not a surprise. 6 percent vacancy (about 4 million sq. ft.) with 6,240 properties surveyed. 68,355,622 sq. ft. in total with 64,188,061 sq. ft. occupied. Trending here is the eye opener: 6.25 percent spiking to 7.25 percent in 2009, falling through 2011, then rising slightly through 2012 to ultimately fall to 6 percent currently. A bouncy ride but remaining fairly tight in range and trending positive over 5 years. Retail took its hit in the bad economy but remained fairly healthy and is now recovering nicely.
This is a weak segment which is no surprise. 14 percent vacancy (about 7.9 million sq. ft.) with 2,246 properties surveyed. 58,142,773 sq. ft. in total with 50,177,343 sq. ft. occupied. We see twice as many office square feet vacant as we do retail square feet and 2.6 times more office sq. ft. vacant than industrial sq. ft.. Trending here is bad with an approximate 10 percent vacancy in 2008 growing to 14 percent in the current quarter. We see a slight improvement from a Q1 2013 peak, but it is a “tear in a river”. We see zero absorption in this market according to this data. When will this get better? No answer here but I would not suggest building an office building in the near future.
*All of this data is courtesy of CoStar.