Houlihan Lawrence Commercial Bullish On Office, Multifamily Markets in 2017
Real Estate In-Depth | February 2017
RYE BROOK—Houlihan Lawrence Commercial Group recently released a report on the commercial real estate and multifamily markets in Southern Westchester County that predicted continued improvement across all sectors.
The report, authored by Houlihan Lawrence Commercial’s Teresa Marziano, noted that Manhattan’s influence on the Westchester commercial markets (south of I-287) continues. She said, “Westchester’s commercial real estate is participating in the overall economic recovery with the occupier market trying to catch-up to the investment market. Lack of investment product and low capitalization rates frustrated buyers during 2016. Expectations of higher interest rates may encourage potential sellers to participate more actively in the market during 2017. This could lead to a robust trading environment and value creation for sellers.”
Marziano stated the multifamily market is “persistently active” with developers allocating capital and bringing new projects to market. Another positive is that local zoning regulations are becoming more accommodating to Transit Oriented Development and investment capital is flowing to projects near rail transportation. “The challenge for 2017 will be to maintain a balance between supply and demand,” she said.
The office market is currently demonstrating a “more hesitant recovery” as compared to the multifamily sector, she related. While the office sector is seeing a break down of traditional offices for more open workspace environments, “the path of transformation (in Westchester) is slow. 2017 may see an acceleration of change in office occupier markets as young businesses gather enough confidence to expand.” She added that the health care sector is a key driver for office space at the moment. Last year, the East I-287 corridor experienced positive office space absorption, while the White Plains CBD lost occupancy.
Marziano related that both the retail and industrial real estate markets are also evolving, with malls and shopping centers being redefined as new homes for service and entertainment providers, while industrial real estate owners are reshaping their properties to become more accommodating to changing supply chains and the need for direct delivery of merchandise to consumers.
“Retail markets ended 2016 with a renewed momentum that we expect will continue into 2017,” she said.