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Commercial Brokers Optimistic About Markets, Opportunities in 2021
WHITE PLAINS—A panel consisting of brokers and affiliated professionals in the commercial real estate market were optimistic that the industry in Westchester and surrounding markets will rebound once the coronavirus pandemic has run its course.
The panelists agreed that the multifamily housing sector will continue to be strong in Westchester once vaccines have been administered and COVID infection rates dramatically declined, while other sectors such as retail and the office sector will have to adapt to changing times. All agreed that the post pandemic environment in the New York City suburbs will create many opportunities for investors.
The Business Council of Westchester and Fordham Real Estate Institute program held virtually on Jan. 5 was entitled “The State of Real Estate: The Path Forward in a Post Pandemic World.” The event was moderated by Chris O’Callaghan, managing director of RM Friedland, and featured panelists: Paul Adler, chief strategy officer for Rand Commercial; Eon Nichols, a partner at the law firm Cuddy & Feder LLP; Andrew Weisz, executive vice president of the RPW Group; Craig Ruoff, executive managing director of Westchester Brokerages at Colliers International; Abe Schlisselfeld, managing partner, Marks Paneth LLP and Bridget Gibbons, director of economic development for Westchester County.
Colliers’ Ruoff said that of late he has been working on a number of long-term (seven-to-10-year terms) lease renewals and restructurings that are scheduled to close in the first and second quarter of 2021.
“What I am hearing from clients, prospective clients and other experts in the industry is that God-willing if everything goes well with the vaccines, business will start to pick up by the summertime,” Ruoff said. “Unfortunately, on the pessimistic side I am hearing from a lot of people that they think it is going to be more likely the fourth quarter of 2021.”
The start of the recovery, he added will be hinged on how fast the vaccines are distributed and administered and the impact on the economy from the vaccines.
Adler said that his firm is seeing “pent-up optimism, but extreme caution.” With most companies having low reserves, they will likely be cautious going forward until the pandemic crisis subsides, he related.
“They have hung in through this year,” he said. Adler later noted, “We are seeing folks realistically plan for the fourth quarter given the slow roll out of the vaccine at this point. Hopefully after Jan. 20 (when the Biden administration takes office) we will see a different direction…”
On the development front in the Hudson Valley, Adler said he is hearing, “Build here, build now.” Companies are interested in the shift to telework and its impact on the market.
He cautioned this trend does not spell the end of the office market, but said the office market “will look different” in the future.
“We have to understand that,” Adler said. “Landlords and tenants will be sparring over shared costs and how much and when and what leases will look like.”
He noted that Orange County and locations further north are seeing increased interest in last-mile warehouse and distribution facilities. In Westchester, the commercial market is seeing a shift from biotechnology to life science development.
“The region’s diversity is our best resource,” he added. “We have a lot optimism and we are proceeding with caution.”
Cuddy & Feder’s Nichols, who represents developers before municipal approval agencies and the Westchester County Industrial Development Agency, was also bullish on future investment in the multifamily sector and other growth industries.
“What we are hearing from our clients is there is a lot of opportunity out there, especially if you spent the last several months sitting on the sidelines being cautious, holding onto your cash looking at deals,” he said. “Once the pandemic is over, hopefully soon, or at least curtailed, I think you are going to see a lot of investment, especially in the housing and retail area.”
Nichols expects retail space both here and across the nation to be repurposed to other uses. Both Nichols and panelists said that investors will keep a sharp eye on the current exodus of New York City residents to the suburbs and whether that trend is short or long-term.
Weisz said he was “incredibly optimistic” about the markets going forward, noting that his firm since the pandemic began has signed 10 leases with New York City companies that are moving part or all of their operations to their properties located in Westchester and Fairfield County, CT. His firm is also looking to develop large residential projects adjacent to its office properties in Harrison and White Plains.
The suburban housing and office markets have not been hit as hard as New York City from the pandemic and therefore should see more leasing and investment sales activity from New York City companies and investors looking to penetrate the Westchester and Fairfield County markets, Weisz said.
“In 2021, once the vaccine is more widely distributed, things are really going to pick up,” Weisz predicted. He also believes that in time, the suburban markets will benefit from companies looking to offer their workers options on where they want to work.
“It will take a little time but I think in the next 24 to 36 months that ‘hub and spoke model’ will play out,” Weisz predicted.
Callahan agreed with Weisz’ prediction, saying, “I think flexibility and adaptability in providing work space for people that no longer necessarily have to take a train into New York City is going to certainly play out.”
Weisz also noted that RPW Group has recently acquired 1055 Washington Blvd. in Stamford, CT. The Westchester County Business Journal reported the Rye-Brook based company purchased the 10-story, 182,000-square-foot office building for $24 million.
Weisz also reported that his firm has signed a lease deal with an unnamed law firm for 25,000 square feet at his firm’s 100 Manhattanville Road property in Purchase.
Westchester County’s Gibbons detailed some of the growth markets the county is seeing at the moment, including bioscience, advanced manufacturing, financial services and technology.