Westchester’s commercial real estate saw a dip in 2024, with lack of inventory and rising interest rates being key factors in the downturn. In the past ten years, the county has been experiencing a boom in mixed-use properties, with municipalities building skyscrapers with retail opportunity on the ground floor.
Since 2021, about 12,500 residential units have been built and 15,000 are under construction in Westchester.
With the current market trends the way they are, can commercial real estate survive, or must it adapt to a new business model?
As of late 2024, the overall office vacancy rate stood at 25.7%, influenced in part by a large, long-vacant 1.1-million-square-foot IBM facility in Somers. Excluding this, the adjusted vacancy rate is approximately 21.3%.
The commercial real estate market experienced slow down in 2024, with the volume of sales falling by 33.75% to $901 million.
Office buildings sales volume plummeted by 84% from $221 million in 2023 to $34 million.
The highest selling price for an apartment building in 2024 was $193 million for a 501-unit building located at 15-27 Bank Street in White Plains.
The industrial sector remains strong, with Westchester boasting an availability rate of approximately 6% and an average asking rent reaching a record of $19.06/sq. ft.
Most popular locations:
- White Plains, especially the downtown area and City Square.
- Yonkers, in areas along Broadway and near St. John’s Riverside Hospital.
Multifamily buildings contributed the most to the commercial sales volume totaling $378 million, about 41% of the total sales.
Leasing activity declined, going from 314 transactions in 2023 to 267 in 2024. The direct average asking rent was $28.43/sq. ft., about a dollar per square foot decrease from the previous year.
However, there is a notable trend towards adaptive reuse of older office buildings, with developers repurposing them for multifamily housing, healthcare, and other uses.
Related: Inside the New Allen Residential Development in New RochelleÂ
