Northeastern office REIT Reckson Associates has reported 1.6 million sq. ft. of new leasing transactions during the first half of the year. The REIT’s strong performance was driven by a flurry of lease renewals with existing tenants and more than 750,000 sq. ft. of new lease signings in the second quarter, according to Reckson president and CEO Scott Rechler.
“Approximately 35% of second-quarter leasing activity was comprised of renewals of leases expiring in 2005 and beyond, reflecting tenants’ recognition of rapidly improving market conditions,” says Rechler. Leasing during the first two quarters of 2004 was the highest in Reckson’s history.
Reckson owns or controls roughly 15.4 million sq. ft. of office property in the New York tri-state area, including Long Island and Westchester County, Connecticut and New Jersey. Portfolio occupancy totaled 94% during the second quarter, up from 91.8% in the second quarter of 2003. Meanwhile, same property net operating income increased by 5.1% during the second quarter of 2004.
Several major Manhattan firms are examining back-up office sites to the north and west of the city. As a result, leasing volume is strong in markets such as Westchester. According to Rechler, many of the big name firms considering a move outside the city are doing so quietly.
Rechler is becoming more optimistic regarding the strength of the northeast office market. “If this leasing activity continues, it will become a landlords’ market up here.”