WESTCHESTER, New York. Most of Westchester’s commercial real estate market has shown strength for the first time in nearly a year, with the exception of a segment of the retail market that continues to struggle, according to Hoolihan Lawrence’s Second Quarter Commercial Market Report.
In particular, industrial and flexible properties are in high demand. The report says the shift to e-commerce and consumer preference for short delivery times have boosted the market. Plus there is a new phenomenon:
“Beyond e-commerce, industrial buildings are now becoming popular locations for ghost kitchens, which are commercial kitchens optimized for food delivery. Each kitchen is located in areas with a high concentration of delivery demand. The kitchens themselves do not have a showcase, and the staff prepares dishes from their menu, which are only available for delivery. “
Meanwhile, the retail sector continued to struggle with weak leasing activity.
“The restaurant industry, which is extremely important to retail, has yet to recover, and other service industries historically important to retail, such as the fitness business, are still struggling,” the report said. “However, the restaurant business is beginning to adapt to the COVID-19 environment. Especially with a sharp increase in the volume of takeaway services. As a result, we see ‘second generation’ restaurants that can do more business for less, especially if it’s an open area. “
The report says that after three consecutive quarters of tenant losses, the office market saw a reversal triggered by a large sublease deal. The rental price has increased slightly.
In addition, the marked increase in rental rates underscored the fundamental strength of the multi-family segment, the report said. Prices and occupancy rates remained high and continued to rise.
“This underscores the attractiveness of Westchester County to newly formed households and those looking for an environment with low population density and excellent access to infrastructure and services,” the report said.