The Commercial Observer: Earlier this year—May, to be precise—you mentioned that occupancy numbers in Westchester County were beginning to tighten up, with the vacancy rate clocking in at about 16.5 percent. How is Westchester looking today?
Mr. Barnes: There’s not been a tremendous change. The White Plains CBD, for example, is still hovering around the 16 percent range—so not a lot has changed there.

WestMed announced a large expansion plan in Westchester and other private medical groups seem to be flocking to the area. Are we beginning to see a medical boomlet?
BioMed [Realty Trust] has been a big industry throughout the year. We had BioMed work out an [$18 million] deal in Ardsley Park [for the purchase of a 159,000-square-foot campus]. So that’s been a big boost, and there’s been some other things that have helped boost the market. Since earlier this year, we’ve also seen a repurposing of some of the tired, old inventory, which is big for the market. There’s some product that’s certainly tired. In the last year or so we’ve had Fordham take 400 Westchester Avenue and the same thing at 500 Westchester Avenue—Sloane Kettering has taken that space.

Earlier this year Starwood Hotels & Resorts announced it would leave Westchester County, and, with it, more than 200,000 square feet of headquarters space and an entire building along the Interstate 287 corridor. What’s the latest with Starwood, and will new tenants step up to fill the void it is leaving in Westchester County?
I believe that was the hotel that’s moving out. That’s going to Stamford. I don’t believe that move has taken place just yet.

In Fairfield County, where vacancy rates earlier this year were slightly higher than those in Westchester County, have those vacancy numbers corrected themselves at all since UBS announced that it would stay in Connecticut for an additional five years?
As far as Fairfield County, the overall county vacancy rate has dropped a bit, and there has been at least some good news related to UBS, which takes some uncertainty out of the market. They’ve committed to Stamford and to Connecticut, to keep a number of jobs in Fairfield County. Removing that uncertainty was certainly a boost to the Stamford market—for sure.

What have you, personally, been working on over at Reckson?
We’ve been working on a lot of large tenant renewals that we’ve done over the last few years so, generally, right now, we feel good about the health of our portfolio. We’ve been able to replace some large tenants with some of the give-backs they had with smaller tenants—so that’s good news for our portfolio. We have a good deal in the pipeline right now, and we’ve taken care of most of the large tenant renewals over the last two years. Generally, we feel pretty good about the health of our portfolio.

Are Fairfield and Westchester equally healthy?
The pipeline is pretty good in both.

There must be some way of distinguishing one from the other, no?
Believe it or not, they look pretty similar right now. They’re similar in size and we typically do have a little bit more volume in Fairfield, and those tenants might be a bit smaller. It’s a mix of tenants—all over the board.

Do you still foresee a slow and steady recovery for Westchester and Fairfield counties?
A lot of people out there believe that we haven’t really begun to recover yet, but I think if you drill down you do see that there are good signs of recovery. I think the foundations are in place for a good strong recovery. First, there’s been the repurposing of some old, tired inventory and, second, what’s been going on recently with the Tappan Zee Bridge would be a nice boost for Westchester County for sure, and, third, UBS committing to Stamford to create 2,000 jobs—that’s certainly a big boost for Stamford.

And the unemployment rates—I believe it’s 8.3 percent in Fairfield County and 6.5 percent in Westchester County, which is the lowest in the state—so I believe the foundations are in place for us to be turning the corner, and for us to see brighter days ahead.
jsederstrom@observer.com

(image via Refinery29.com)

New York designers, editors and stylists could die if they held their breath, waiting for an invite to Vogue contributing editor Andre Leon Talley's home in Westchester County. He never has guests, according to his "Dispatch" turn in the Times' Sunday Review.

"It's a sanctuary and I want it to be my own personal Ali Baba cave of delight," he said.

The treasures therein include china and silver from Lena Horne's estate sale and cupboards "jammed" with porcelain from Paris, linens, and crystal, but he's never had a dinner or luncheon party.

If one does score the rare invitation (only in summer), he or she will be received on the front porch, with wicker trays found at Pottery Barn, and served iced beverages. There will be "a tray of canapes or Planters peanuts, jelliyied candy from Paris, and a good bottle of Sancerre."

Among the other pleasures of the suburban life, according to  Mr. Talley, is driving his S.U.V. to The Container Store at the Westchester mall.

"It's the best place for my new modern luggage, nylon-padded suitcases on three wheels. I also buy lots of storage bins for my at-home office, and at Christmas I splurge on special fancy paper, to wrap Whoopi Goldberg's presents," he said.

They do Christmas together, apparently.

So as the White Plains CBD starts to tighten up, that's a good indicator for us that you're going to start to see some movement in the rest of the market. So we're starting to feel good about the signs.

Has it been a slow recovery compared to New York or the rest of the country?
I wouldn't compare it to what's happening in the rest of New York. What I would say is that we typically lag New York. And under normal circumstances it's anywhere from 12 to 18 months behind New York City. But we are seeing some good activity. In our downtown White Plains portfolio we've seen very good activity-particularly at our flagship at 360 Hamilton Avenue.

When did you first begin to see leasing tighten up?
It's beginning to tighten up. It's still not where it needs to be. But our first indication was at 360 Hamilton Avenue, and that would have been midway through last year, or toward the end of last year, during the third and fourth quarters of last year.

What are the average rents in Westchester?
The average rent for the end of last year is somewhere around $29. I mean, it's the mid- to high-20s. But there's a lot of factors that go into that.

Describe the tenants who are looking for space in Westchester right now?
We've not seen a lot of new introductions to the Westchester County market yet, although there was some good news in that we did see [the hummus company] Sabra take some space here in Westchester County. That was a new introduction.

But those are few and far between. We do see a little more activity, which means tenants are actually making some of those decisions, but you're still seeing some of the average sizes in the 6,000- to 7,000- square-foot range, and they're moving around within the county.

In better times do you see more new introductions, or is it always the same players?
We'll know that there are better times when we start to see some of those new introductions. That's a real good indicator to watch for us.

What are you hearing from tenants right now? What are their concerns, and why are they returning to the market right now?
Well, strength of ownership is definitely a concern, from what they've seen over the last three or four years in regard to what has happened to some very prominent landlords in and around the area. So strength of ownership is a concern of theirs.

Their own business uncertainty is a big concern of theirs, which means they want some flexibility in any new deal that they cut.
And up until now, a lot of them over the last two years-the ones that were able to make longer-term decisions-were taking advantage of the market. It was clearly a tenants' market at that time.

Are people leaving Westchester?
There's obviously one very prominent tenant that's leaving Westchester County, and that's Starwood Capital. That's obviously a big hit to the county. They weren't my client so I prefer not to comment on their move.

You also cover Fairfield County? Is the situation in Connecticut similar to what you're seeing happening in Westchester County? Are they spitting images?
I wouldn't say it's a spitting image. It's an interesting market in Fairfield. What I would speak to is more of the Stamford CBD, because that's where our product is; I don't have product outside of the Stamford CBD.

But the Fairfield market appears to have a little bit more activity, and it's at a little bit better rate. It does have some interesting dynamics because if you look at the vacancy rate it's a little bit higher than Westchester County. I think it's north of 22 percent in that market for Class A buildings, but that's also skewed a little bit by the old Lehman building-the old headquarters building-will be coming back on line pretty soon. And that's now completely vacant, and that's more than half a million square feet of empty product being thrown into that mix.

So that number is skewed a little bit. But the activity level there seems to be getting stronger.

With regard to concessions that landlords are offering, have you seen them dissipate or are they still as widespread as they seem to be in New York City?
We're starting to see that tighten up. Through the end of last year, we started seeing some of the concession packages tighten up.

Finally, how do you market these two areas, especially right now?
Well, I think that, honestly, the strong suits for these two markets are the intellectual capital-the workforce here is a highly educated workforce. The roadway and infrastructure for both locations is tremendous. And to get in and out of the areas-and in White Plains, in particular-is just a 30-minute train ride into midtown Manhattan. And, of course, the roadway system here is very strong. But the intellectual capital here is really second to none. That's how I would sell it.

jsederstrom@observer.com

Some financial-services firms, in particular, said Robert Sammons, vice president of research services at Cassidy Turley, are finding "there's a cultural and collaborative need to have your base in Manhattan." There's also ready access to the young talent many of these companies crave. Among the most tremulous of rumors is one that has UBS moving its massive Stamford operations, including a 103,000-square-foot trading floor, back into the city.

Nevertheless, the outer markets are plotting their own steady if slow recovery. Many suburban tenants are starting to see modest growth in their businesses, and realizing, not uncoincidentally, that they can't expect to get office space for next to nothing. Rents are up, even as some vacancy rates stagnate.

"Overall, it's an improving marketplace, with some healthy evidence of recovery through the region," said Ed Tonnessen, an executive managing director in Jones Lang Lasalle's Stamford office. "But the activity is not raising all boats with that tide."

Long Island

"The market is starting to pick up," said Michael Aievoli, a principal in Newmark Knight Frank's Long Island office. "Landlords are lowering the asking rents from three years ago." The problem last year, Mr. Aievoli said, was that tenants "thought there was a fire sale."

Now both sides are coming to terms more often. It doesn't hurt that Long Island's unemployment rate dropped to 7.8 percent in the first quarter of 2011; a year earlier, it was at 8.3 percent.

Most of the leasing action is in Melville and Garden City, with the growth of the collections industry--always flush in times of economic turmoil--cited as a key driver. Education and health services companies are also adding more jobs, with business services and transportation playing a role, too. Cassidy Turley's Mr. Sammons said the Long Island market has been "the most stable of the suburban areas," due to very little new construction in Nassau and Suffolk counties, though Nassau has "government debt issues" that may curb future development.

The vacancy rate in Nassau and Suffolk combined was 10.3 percent as of the end of the first quarter, according to CoStar. This is a slight improvement over the fourth quarter of 2010, and a clear sign of a stabilizing market.

Still, major office deals of the first quarter weren't so major. One of the biggest was MBS Insight's 31,561-square-foot sublease at 265 Broadhollow Road in Melville. Two under-30,000-square-foot deals of note were Guardian Life Insurance's 26,000-foot deal at 250 Crossways Park Drive in Woodbury and Winthrop University Hospital's 13,000-foot lease at 1000 Franklin Avenue in Garden City.

Most of the movement is from companies already in the area. Suffolk is "typically less expensive than Nassau," Mr. Aievoli said. As a result, some tenants in Class B space in Nassau are trading up to Class A space in Suffolk. Chuck Tabone, managing principal of Newmark Knight Frank's Long Island office, adds that space in Nassau County is "relatively tight" since "no one's building new buildings."

Northern New Jersey

Northern Jersey actually consists of two distinct office markets: the Hudson waterfront and everything else. The Hudson Waterfront area "acts as a relief valve for New York City," Mr. Sammons said, particularly for the financial services and insurance industries. That market, he said, has "tightened up over the last few quarters." The rest of the area, in contrast, is "relatively stable," he added, with tenants "moving around but not shrinking or expanding."

For northern New Jersey--including Bergen, Essex, Hudson, Middlesex, Morris, Passaic and Union counties--the average office rent rose to $24.25 per square foot in the first quarter, the highest in five quarters, according to CoStar.

The Hudson Waterfront submarket had an availability rate of 9.2 percent for the first quarter of 2011, according to Newmark Knight Frank; as compared with a 13.5 percent vacancy rate for Northern New Jersey as a whole, per CoStar data.

One interesting development has been the conversion of some Hudson Waterfront office space to residential developments, a function of the slack commercial market in recent years.

The biggest first-quarter deal in the Garden State was the leasing of 127,865 square feet at 95 Columbus Circle Drive in Jersey City to Quality Technology Services. But the most talked-about move of the moment is that by electronics giant Panasonic, which announced on April 19 that it will relocate its North American headquarters from Secaucus to a yet-to-be-constructed building on Raymond Boulevard in Newark. The state's Economic Development Authority provided a $102 million transit hub tax credit to keep the global corporation from moving out of state, perhaps to Brooklyn.

Meanwhile, the company's current landlord, Hartz Mountain Industries, has filed an appeal to halt the move. While Newark Mayor Cory Booker called the deal "historic," the town of Secaucus has raised objections, claiming the tax credit was unfair to towns hurt by the transfer.

Westchester

With its aging office parks, many built in the 1980s and 1990s, Westchester County offers limited options for tenants seeking Class A space. On the other hand, its highway system is "unparalleled," according to John Goodkind, a managing principal at Newmark Knight Frank. In particular, the corridor along I-287 has shown significant leasing action. However, Westchester County's overall vacancy rate rose slightly to 11 percent during the first quarter, as compared to 10.9 percent in the fourth quarter of 2010, according to CoStar.

"Downtown White Plains has had a pretty good run in the last year," said Ed Tonnessen, an executive managing director at Jones Lang Lasalle, "with real rent growth, stability and recovery." The average rent rose slightly to $24.95 per square foot, per CoStar. But Mr. Tonnessen added that the rest of Westchester remains a "tenant-favorable marketplace."

Nonetheless, northern Westchester accounted for much of the quarter's leasing activity. Easily the biggest deal of the quarter was Pepsi Bottling's renewal and expansion at 1 Pepsi Way in Somers. Connecticut had attempted to lure the headquarters of the bottling division to Danbury in late 2010. Instead, it is taking over the entire 540,000-square-foot building where it's now located. In other news, My Publisher is leasing 31,594 square feet at 400 Columbus Avenue in Valhalla.

In lower Westchester, Guggenheim Partners rented 31,142 square feet at 4 Manhattanville Road in Purchase.

On the negative side, Starwood Hotels & Resorts is moving 800 employees and relocating its headquarters from Westchester Avenue in White Plains to Stamford. "It's not a dynamic market by any means," Mr. Goodkind said. "It just sort of keeps percolating."

Fairfield County

Southwestern Connecticut's office market easily supports the Gold Coast moniker often applied to the area as a whole. Fairfield County, for whatever reason, still holds some cache, particularly for high-end financial-services clients drawn to Greenwich and Stamford. Easy access to Metro-North makes downtown locations closest to the railroad the most desirable.

While rents remain high, as much as $40 to $42 per square feet coming out of the recession, the vacancy rate continued to rise to 12.8 percent, according to CoStar. In a "disturbing" trend, said Mr. Goodkind of Newmark Knight Frank, leasing by hedge funds has "slowed up" in recent quarters.

The first quarter's big deals included cosmetics company Beiersdorf, which leased 46,125 feet at 45 Danbury Road in Wilton. New York City-based Chelsea Piers rented 41,700 feet in Stamford, with plans for a sports and entertainment complex. The aforementioned Starwood Hotels & Resorts' move from Westchester to 17,316 feet at 333 Ludlow Street in Stamford was spured in part by more than $90 million in tax incentives offered by the state. Most surprising, perhaps, is Design Within Reach's cross-continental move of its corporate headquarters from San Francisco to Stamford. The contemporary-style furniture merchant is renting 28,000 feet in the former Yale & Towne lock factory building being renovated as part of the Harbor Point redevelopment project.

"Quality is in demand with quality rents," said Mr. Tonnessen of  Jones Lang Lasalle. "It's not startups" but rather "companies that have weathered the storm" that are improving Fairfield's prospects.

Indeed, "stability" is the watchword of the outer-office leasing market in 2011 so far. While leasing numbers are off market bottoms, there are some markets that are farther from the bottom than others.

"Not everybody went out of business a year ago," said Newmark Knight Frank's Mr. Aeivoli. "You're still seeing renewals, but you want to see more expansions."

realestate@observer.com

The plan is somewhat controversial for not including full emergency care or inpatient services, though the judge in the case would not allow a community group backed by a mysterious hospital and developer more time to submit its own plan. According to WNYC, the group, led by former Councilman Alan Gerson, is considering filing an appeal, even as the judge backed St. Vincent's argument that the plan put forth by North-Shore LIJ and the Rudins was the most expeditious option.

What is oddest about the challenge is the one partner the group was willing to identify, which Crain's reveals would have brought the gridiron to Greenwich Village:

But the group cited only one possible collaborator: the National Football League Alumni Association, which the trio said indicated "that they may like to be involved in establishing a hospital to treat their members [as well as the general public]. They would bring the NFL logo to any such development."

There is still a touchdown to be scored by another developer, though, as The Journal reports that St. Vincent's is also selling off a prized 37-acre swath of prime Westchester real estate.

mchaban [at] observer.com | @mc_nyo

My Fox NY notes that as recently as July a cop took a shot at a coyote spotted in a Yonkers public park, but after a series of attacks in June, they've begun to look like a real problem in Westchester. Coyotes may love their ACME products but they are usually afraid of people. If you see one you are advised to call the authorities. If your pet comes in contact with one, call health officials.

[MyFoxNY]

Like Nic Cage, whose real estate problems have been well documented, the former Merrill bigwig Robert Fuscone is in trouble. His 18,471-square-foot Westchester mansion ("two swimming pools, two elevators, six fireplaces, 11 bathrooms and a seven-car garage") was scheduled for a Thursday foreclosure, which was postponed after he filed for bankruptcy.

According to a press release at the time of his 2000 retirement from Merrill, Mr. Fuscone had held nice-sounding jobs at the firm like executive chairman for Latin America and Canada (sadly, the Journal leaves out the Canadian part), the COO of Merrill's Corporate and Institutional Client Group, the co-head of Global Fixed Income and then the sole head of Global Debt Markets. "Rick has built an outstanding reputation for his business savvy, leadership skills, sound judgment and personal integrity," two company executives said then. "We are grateful for his many contributions to our firm and wish him the very best in his future endeavors."

In a 1979 Forbes piece, Mr. Fuscone gave an interview about commercial paper while staring "soberly into a Virgin Mary in the executive aerie atop Merrill Lynch." He is also seen "nibbling nonchalantly on a bread roll."

Rain fell. Wild turkeys shuffled by. An owl hooted. It was like a Victorian novel, except Victorian novels end with marriages, and the main story at this infinite estate, Holly Hill, ended when the regal philanthropist Brooke Astor died here last year at age 105. She was survived by one son, Anthony Marshall, a handsome ex-ambassador who has pleaded not guilty to a 16-count indictment accusing him of stealing his mother’s fortune while she suffered from Alzheimer’s.

“I try to stay away from that and sell the property—present it in the best light so we can get the most money for it. I try not to be distracted,” Mr. Turner said. This week he is listing the property, on Scarborough Road in Briarcliff Manor, for $12.9 million.

“Oh! Oh! There’s a deer,” he said, driving his BMW along the road that leads from the gardener’s cottage (with four bedrooms) to the chauffeur’s apartment (atop a five-bay carriage house), to the ancient pump house, to the barn (with a three-car garage), to the small museum, to the hefty but empty greenhouse, to the root cellar, to the pet cemetery.

And those were on the car’s left. On the right were the cutting garden, the holly hedgerows, the outdoor pool overlooking a meadow and croquette lawn, the apple orchard, and that Love Temple. Deer actually frolic in the orchard.

“Look at that buck,” Mr. Turner cooed. “That is a good-sized buck. That is a five-point buck.”

Mr. Turner has two topographic maps in the BMW that show how a potential buyer might build either one or three new houses and pools. He and his colleagues at Sotheby’s International Realty “have relationships with lots of developers,” he said. “We are, of course, going to show it to them.” The estate has not opted to create a conservation easement, which would, as he says with a shrug, “give up development rights forever.”

But no postmillennial house could have the ancient poise, grandeur and symmetry of Astor’s 24-room, 13-bedroom, 11-bathroom stone house, built by William Adams Delano in 1927. Unlike the Astor duplex on Park Avenue, currently listed for $34 million, it’s still saturated with her imperial belongings: The first thing you see, after the vestibule’s cane rack, is a Presidential Medal of Freedom hanging on the left of the marble foyer.

The vestibule leads to the 42-foot-long parquet-floored drawing room, which leads to a sun porch called the Philosopher’s Room, which leads to the indoor pool, still pale blue but not the 90 degrees that Astor liked.

Then there’s the photograph-covered Memory Room; the wet bar (with Tabasco and bitters); the slightly scary one-person elevator; the library; the dining room; the second sun porch; the butler’s pantry; the kitchen; and the four-room staff quarters, which are a relatively dour new addition to Delano’s house.

Walking from the second floor’s balconied master bedroom suite to the Cardinal’s Room (telegrams from the Vatican are on the wall) to a primly twin-bedded guest bedroom, Mr. Turner concedes that his biggest listing until this week was a $15.75 million house in Bedford Corners that went down to $11.75 million, but hasn’t sold.

On the bright side, he broke local real estate records in Chappaqua, where the Clintons own a home, when he sold a hilltop brick Colonial this summer to the Upper West Side market heiress Ann Zabar for $8,372,500. Still, almost everything is having trouble selling these days, including the Astor duplex on Park, recently price-cut by $12 million.

(That duplex, like Holly Hill, has apparently been bequeathed to Mr. Marshall, but neither is actually his yet because of the ongoing criminal case.)

And yearly taxes for the Westchester estate are now a stupefying $199,000, according to the broker. “I think if someone’s worried about the taxes on this property,” Mr. Turner offered, “they can’t afford to buy it.”

mabelson@observer.com

As they did in Manhattan, home sales in Westchester County jumped in the first three months of 2007. Sales were up more than 18 percent from the fourth quarter of 2006 through the first of this year, according to the Westchester-Putnam Multiple Listing Service. In the first quarter, in fact, Westchester recorded 10,250 home sales—more than what Manhattan typically sees in an entire year.

Well, for one thing, Westchester’s housing market has buoyancy similar to Manhattan’s, where sales were up 42 in the first quarter to a record-high number of 3,474, according to appraisal firm Miller Samuel (PDF). It also means that Westchester’s housing market may be healthier than those of other New York City suburbs.

First-quarter sales in Nassau County dropped 14.9 percent from the fourth, according to Miller Samuel (PDF). Suffolk County sales were down 23.5 percent quarter over quarter.

But all is not rosy in the cheery train-it-in land of New Rochelle and Yonkers. While sales did show strong gains in the first quarter, the inventory of unsold homes on the market bumped upward, too—3.9 percent over the fourth quarter, part of a trend of rising inventory that stretches back into at least 2004.

Like in Manhattan, home sales in Westchester County jumped in the first three months of 2007. Sales were up more than 18 percent from the fourth quarter of 2006 through the first of this year, according to the Westchester-Putnam Multiple Listing Service. In the first quarter, in fact, Westchester recorded 10,250 home sales—more than what Manhattan typically sees in an entire year.

Well, for one thing, Westchester’s housing market has buoyancy similar to Manhattan’s, where sales were up 42 in the first quarter to a record-high number of 3,474, according to appraisal firm Miller Samuel (PDF). It also means that Westchester’s housing market may be healthier than those of other New York City suburbs.

First-quarter sales in Nassau County dropped 14.9 percent from the fourth, according to Miller Samuel (PDF). Suffolk County sales were down 23.5 percent quarter over quarter.

But all is not rosy in the cheery train-it-in land of New Rochelle and Yonkers. While sales did show strong gains in the first quarter, the inventory of unsold homes on the market bumped upward, too—3.9 percent over the fourth quarter, part of a trend of rising inventory that stretches back into at least 2004.