The Towns of Westchester Beckon
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Steven Roth, the chairman of Vornado Realty Trust, the developers of the mixed-use office building at 731 Lexington Avenue that is home to Bloomberg LLP and is considered by many as visionary, said a good portion of the city’s population abandoned Manhattan and moved to the suburbs in the 1970s. These people sought good, reasonably priced housing, quality schools, and would commute to and from work.
Mr. Roth said that today, “These people are abandoning the suburbs and returning to the central business districts to live and work.” According to Mr. Roth, “Manhattan has the best of everything – office buildings, residential apartments, lawyers, doctors, professionals, the arts, restaurants, and other amenities.” A number of Westchester real estate leaders do not agree with Mr. Roth.
The managing director and principal of Robert Martin Development Company, Tim Jones, said, “I really do not think people are abandoning Westchester based upon my recent visit to the Westchester Mall, when it took me more than a half hour to locate a parking spot.”
“Two years ago, my 25-year-old children would not ever want to spend time in downtown White Plains, and today, at 2 a.m. on a Saturday, the city is bustling with activity, said Mitchell Benerofe of Benerofe Properties.
“White Plains has been transformed into a 24/7 community, with work and living space,” said the executive vice president and chief operating officer of Reckson Realty Associates, Sal Campofranco. “In the city of White Plains, during the past two years, close to $2 billion has been invested in a city that has less than 50,000 residents,” he added. “People want the quality of life of Westchester…you can live in the country and have great access to Manhattan. The travel time to Grand Central from White Plains on Metro North is only 35 minutes.”
The chief executive of Ivy Equities, Anthony DiTommasi, said, “The city has seen gentrification over the past 10 years. All one has to do is to see the work of Cappelli Enterprises.” Capelli Enterprises is building a development called City Center in White Plains, a $325 million project with two 35-story residential towers on the site of the former Macy’s department store. One of the towers, now known as Trump Tower at City Center, has 212 luxury condominiums and is scheduled to open in the summer of 2005. Additionally, in August Capelli Enterprises broke ground for its newest project, Renaissance Square, which will include a luxury hotel, two residential towers, and an office tower in downtown White Plains. The development has 600 apartments, a multiplex cinema, the Westchester Art Center, retail tenants including Target, Legal Sea Foods, and others, said Mr. DiTommasi.
Last year, Mr. DiTommasi’s company purchased 275 Main St. in White Plains, a 350,000-square-foot building that had housed a Sears. Last month, the world’s largest retailer, Wal-Mart, signed a lease to open a 280,000-square-foot Supercenter on two levels of the building, the company’s first store in White Plains.
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White Plains has and continues to be the hub of retail in Westchester.
Last year, the retail center called The Source at White Plains opened. It is a 260,000-square-foot retail center with a Fortunoff store on the top three floors. Other tenants include Whole Foods Grocery, Morton’s Steakhouse, Cheesecake Factory, and Total Fitness. White Plains has four other retail properties, including Westchester Mall, anchored by Neiman Marcus and Nordstrom; the Galleria at White Plains Mall; the power center Westchester Pavilion, and a freestanding Bloomingdale’s.
Mr. Camprofranco says that the city government, led by Mayor Delfino, is proactively seeking residential and commercial development
A principal at Houlihan Parner/iCap Realty Services, Jim Houlihan Jr., and the development director of AvalonBay Communities, Phil Wharton, said many of the other cities in Westchester are not user-friendly and that it takes years to have plans approved for residential and commercial development. Both agree that, on the other hand, the city of New Rochelle is very user friendly and proactive in seeking development, willing to try to enhance the community.
“New Rochelle is a 25-minute train ride on Metro North to Grand Central, and a community that offers brand new apartments directly adjacent to the train station at rents which are at least 30% lower,” Mr. Wharton said. The monthly rental for a one-bedroom apartment at AvalonBay’s 38-story tower in New Rochelle is about $2,000, while a similar apartment at its Avalon Chrystie eight-story building, which will be ready for occupancy in the spring, will be $2,800 a month. Early next year AvalonBay will break ground on its second 38-story rental tower adjacent to the Metro North station in New Rochelle.
Bronxville is another city in Westchester, less than 20 minutes by train to Grand Central station. AvalonBay apartments in Bronxville are more expensive than in New Rochelle yet less expensive than in Manhattan.
Unfortunately, all of the participants at the meeting said one city that is very bureaucratic is the city of Yonkers, the largest city in Westchester County.
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When asked about the typical tenant in an AvalonBay rental building in Westchester, Mr. Wharton said tenants are usually (a) someone who is in transit, (b) waiting for home prices to decline, (c) who will remain in the apartment for one to three years, (d) emptynesters who sold homes in Westchester and want to remain in the community, or (e) divorced individuals who want to be near their family and cannot afford to buy a home. The average tenant is about 30 years old and will live in the unit for about two years.
First-time homeowners can purchase a 20-year-old cooperative apartment in certain towns of Westchester for prices ranging from $180,000 to $250,000, said Mr. Houlihan.
“The average price of a house in the county has risen to $740,000 from $650,000 the previous year,” said Mr. Jones. According to the panel of guests on my TV show, the median price of apartments on the market is in the range of $300,000, significantly less than in Manhattan and Brooklyn.
Office rents are significantly lower in Westchester. The price per square foot for space in a class-A office building in Midtown Manhattan ranges from $60 to $90 a square foot. Similar office space in White Plains is in the range of the high $20s to low $30s per square foot, while rents in Valhalla and Rye Brook are about $28 a square foot. Over the past few years, companies such as New York Life and Morgan Stanley have moved parts of their operations to Westchester County.
While Westchester is not New York City, it offers convenience in its proximity to the city and significantly lower office rents. Young adults have the opportunity to purchase a cooperative or condominium at significantly lower cost than in Manhattan, as well as rentals that can save up to 30% in their monthly rental charges. Nevertheless, Westchester is not Manhattan or Brooklyn or Queens. The cost of commuting is significantly greater than the bus or subway. Notwithstanding, Westchester is an excellent low-cost alternative for both business owners and residents.
Mr. Stoler is a television broadcaster and vice president at First American Title Insurance Company of New York. He can be reached at mstoler@nysun.com