Study: Westchester losing to Fairfield in commercial real estate
While the commercial real estate industry is slowly rebounding, the big money institutional buyers continued to favor Fairfield County in Connecticut over Westchester during the past year, according to a new analysis.
In 2012, institutional buyers such as union pension funds and life insurance companies bought an estimated $75 million in Westchester retail, industrial and office properties, and accounted for 8 percent of commercial real estate buyers. The amount is down from the $125 million they spent in 2011.
By comparison, institutions that went across the state border to shop in Fairfield purchased $200 million in 2011 and again, in 2012, snapping up buildings, office complexes, malls and other land deals, according to Jones Lang LaSalle senior analyst Erin Patterson.
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Institutional investors, which traditionally have deep pockets and are conservative by nature, are only one type of real estate buyer. But their waning interest in the Westchester commercial real estate market "does not bode well," Patterson said. "It means that the market in Fairfield is being perceived as a more stable area with solid growth prospects."
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As for the issues in Westchester, which has the highest property taxes in the nation, the county is struggling along with the rest of the nation in coping with both a weak economy and job growth. Its commercial real estate is lacking too, she said: "The county struggles a lot with buildings that are aging and functionally obsolete and they're just not positioned to attract the limited demand that does exist for office space."
But Westchester County Economic Development director Laurence Gottlieb, brushed off the latest analysis. "The report is only looking at one side of the coin and I have to look at the whole dollar," he said.
"The problem is the chart is only looking from an investment perspective, whereas I'm trying to keep the companies I have and attract other companies," he said. "Right now, Westchester County is extremely competitive. I'm not looking for bargain hunters. I'm looking for long-term corporate investment that translates into job growth."
"We share the same boundary line so you don't have to go far away," said Laure Aubuchon, Stamford's economic development director. Besides lower sales, property and state taxes, "I think we have a better quality of life," she said.