NORTHEAST SNAPSHOT, OCTOBER 2005
Westchester County, New York, Retail Market
The retail market in Westchester County, New York, is thriving after years as an underserved area. New centers have emerged throughout the county as retailers and developers have recognized the viability of this market, located squarely between New York City and affluent Stamford, Connecticut. Development has been continuing at a crisp clip for more than a year and shows no signs of abating.
“The majority of development is taking place, with great difficulty, in the cities such as White Plains, New Rochelle, Yonkers and Port Chester,” says Joseph French Jr., senior investment advisor with Sperry Van Ness in White Plains. An aggressive influx in housing development sparked the current retail growth, helping to bring a varied mix of regional and national retailers that were not previously in the county.
The county has long been under-retailed. “You go to other parts of the country and you see these national retailers, and they were just not in Westchester County,” French explains. “There are a lot of obstacles that stop them.” Until the current trend of urban infill and redevelopment, there was very little opportunity or space for retail development. Also, with its proximity to New York City, the media costs for retailers opening stores in the area often predicates that companies open multiple stores. In the past, the sales numbers did not justify these high costs.
Retailers new to the county include Target, Wal-Mart, The Home Depot, Costco, Famous Footwear, Filene's Basement, Michaels, Bed Bath & Beyond, Whole Foods Market and Stop & Shop.
Cities such as White Plains and New Rochelle have undergone dramatic facelifts in their downtown and central business districts. Cappelli Enterprises, a Valhalla, New York-based developer, is busy in both cities, developing numerous mixed-use retail/residential projects in the revitalized downtown markets. White Plains also had an expansive mixed-use entertainment and retail town center developed that houses national companies such as Target and a major theater chain, the first theater in White Plains in approximately 15 years. R Squared LLC recently sold its 3-year-old The Source at White Plains center, a 260,000-square-foot shopping complex 100 percent leased to Fortunoff, Whole Foods Market, Morton's Steakhouse, The Cheesecake Factory and Destination Maternity. The center traded for $153 million to Bloomingdale Road Investors LLC.
Vacancies throughout the county are in the low single digits, according to French. “There is virtually no space,” he says. “The only retail vacancy is when a chain goes bankrupt.” The vacant spaces often appear in small, freestanding buildings not attached to centers.
Rental rates have steadily climbed, encouraging developers to pursue new opportunities across the county. “Retailers aren't paying New York City rents, but they are paying $30 to $40 per square foot and there are some $50 per square foot rents in some areas,” French says.
Further retail development will occur along Central Avenue, which runs through several Westchester County towns and until now was often ignored due to its rocky cliffs and difficult terrain. French also expects the river towns such as Tarrytown and Yonkers to undergo significant changes as the blighted waterfront and downtown districts are reinvigorated, first with residential and then with retail development.
As the top-tier services and retailers come to Westchester County, expect the strong response from the long underserved county to encourage more growth in the retail sector of the next few years. The growing residential and office markets will strengthen the area and establish it as a viable counterpart to its neighboring areas New York City and Connecticut.
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