NORTHEAST SNAPSHOT, SEPTEMBER 2004

Hudson Valley Office Market

The New York Hudson Valley has numerous major office developments in the works. “The Hudson Valley, particularly the lower Hudson Valley, is seeing the continued absorption of Class A office space,” notes Anthony Campagiorni, president and CEO of the Hudson Valley Economic Development Corporation (HVEDC). “It is New York State’s fastest growing region in terms of both job growth and population, which helps foster a healthy office market.”

National and international companies alike are relocating to the area and many existing companies are expanding. “In the past year alone, more than 1.8 million of the 10 million square feet originally listed on the HVEDC property database have been leased, resulting in nearly 4,000 new jobs,” says Campagiorni.

Nokia plans to establish a New York corporate office for its Enterprise Solutions business group in a 102,000-square-foot building located in Harrison. Before Nokia moves employees into the office, the building will undergo nearly $30 million in renovations. Also in Harrison, Morgan Stanley is investing $227 million to transform what was the Chevron/Texaco headquarters into a data center and backup trading facility. Two new tenants, Argent Mortgage Company and Endurance Reinsurance Corporation, have combined to lease more than 165,000 square feet of the former Kraft headquarters in White Plains. Moving into the Hudson Valley, New York Life is relocating 1,000 employees from Manhattan to an executive center in Mount Pleasant.

In Rockland County, Avon has announced it will build a $100 million global R&D center in the city of Suffern. Scheduled to be complete in early 2005, the 225,000-square-foot building will house approximately 350 employees. WMC Mortgage of California is establishing a new Northeast base in Orangeburg. The lender is leasing 55,000 square feet of space at One Ramland Road and has already hired more than 200 employees. Cadbury Schweppes companies Snapple and Motts plan to combine headquarters in Rye Brook, relocating more than 400 employees to a 135,000-square-foot office space once the $10.9 million renovations are finished.

Further down the Hudson Valley, in Yonkers, nValley Technology Center just opened a new office space after $14 million in renovations that modernized the 116,000-square-foot former home of Purdue Frederick Pharmaceuticals.

With the influx of prospective tenants, new developers are moving into the Hudson Valley area as well. First Columbia will build two new office buildings at New York International Plaza at the Stewart International Airport in New Windsor. Construction on the 60,000-square-foot and 20,000-square-foot Class A office buildings will get underway in September and be complete in spring 2005. Class A rental rates range from $8 per square foot in the northern counties to the mid-$20s in the lower Hudson Valley.

Cohen Brothers Realty recently acquired 333 Westchester Ave. in White Plains, a 632,000-square-foot building with 50,000 square feet available. Castagna Realty, a newcomer to the Hudson Valley, has developed Castagna Commerce Park in Pawling.

While development in Rockland and Westchester counties is increasing, the Interstate 84 corridor shows the most promise for near-term future development. The interstate highway links Hudson Valley’s two fastest growing counties: Dutchess and Orange.

“Thanks to its close proximity to New York City, outstanding transportation infrastructure and workforce of 1.1 million people, the Hudson Valley is blessed with a vibrant economy,” says Campagiorni. “Companies seeking to relocate or expand in the region will find abundant office buildings available, including former headquarters, lab space, data centers and more.”

The region — easily accessed by six interstate highways, six international airports, and extensive commuter and freight rail service — has one of the nation’s most advanced telecommunications networks. With so much in the works for this region, expect the Hudson Valley to continue to experience growth in development of office space.

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