In this feature, we delve into the intricacies of the 2024 economic forecast, exploring the pulse of key sectors that shape the business landscape.
With the business environment changing rapidly and changing demographics leading to declining enrollments, many higher education institutions in Westchester County have looked to new ways to stay relevant.
“The regionʼs educational institutions need to adapt, evolve, and thrive in this ever-evolving landscape,” says Dr. Frank Sánchez, president of Manhattanville College, a private nonprofit institution where one of the major initiatives, in addition to the inauguration of Sanchez as the 15th president, will be relaunching as Manhattanville University this spring. “More than ever, colleges need to demonstrate a deep focus on practical skills, career preparation, and the nurturing of a diverse and inclusive community.”
That focus on practical and relevant experience is shaping many programs. Purchase College will be devoting considerable attention to experiential and applied learning in 2024, according to President Milagros Peña.
“We’re focused on the areas where Purchase College has always been extremely strong, which is developing the type of skills that are really at the core of liberal arts education — critical thinking, communications, creativity,” says Peña.
The school is also expanding its offerings in technology and media. The cinema studies area, for instance, has evolved into Cinema and Television Studies. Purchase has also added a biotech concentration. “Thinking toward the future, that prepares students for a career in a vibrant field, as part of that need for a skilled workforce in that area,” says Peña.
Iona University is also prioritizing experiential learning and local engagement, with students partnering with the cities of New Rochelle, Mount Vernon, Yonkers, and Peekskill to solve community challenges. As the school develops its campus in Bronxville, it will be adding high-demand academic programs and degrees through the NewYork-Presbyterian Iona School of Health Sciences such as two new Master of Science degrees in nursing: Nursing Healthcare Organizational Leadership and Nursing Education.
“The region’s educational institutions need to adapt, evolve, and thrive in this ever-evolving landscape.”
—Dr. Frank Sánchez President, Manhattanville College
“Both are vitally needed in today’s workforce, and together with NewYork-Presbyterian, Iona is proud to be providing a cutting-edge education for those who feel called to serve others through the health sciences,” says Iona University President Seamus Carey.
Iona is also opening a new campus in County Mayo, Ireland, in May 2024 on the historic 400-acre Westport House Estate. “Iona Ireland connects to our Irish heritage,” says Carey.
Pace University, in the meantime, just launched its seventh school and college, the Sands College of Performing Arts, at its campus in lower Manhattan. The university is also adding or revamping about a dozen programs, mostly on the graduate level, to reflect market needs, and adding new online and hybrid programs in areas including game development, business technology, health informatics, school psychology, human-centered design, media and communication arts, cybersecurity, data science, and health law. Building on its recently launched e-sports program, the university will also be integrating the varsity sport into the curriculum and launching a Bachelor of Science degree in Computer Science and Game Development.
Pace has also focused on experiential learning, expanding its commitment in academic areas such as IT, artificial intelligence, cyber, healthcare, business, film production, and law. Earlier this year, for example, the university opened Cyber Range, a state-of-the-art computer science lab where students learn how to identify and defend against cybersecurity attacks in real-time through interactive, simulated platforms.
Meanwhile, Pace’s Seidenberg School of Computer Science and Information Systems — one of the countryʼs few Centers of Academic Excellence in Cyber Defense Education — won a new designation from the Department of Homeland Security and the National Security Agency (NSA). Pace recently signed an Education Partnership Agreement with the NSA to play a major role in developing talent and tools for possible national security challenges. Across campus, Pace is modernizing its lab and classroom space, and recently completed a flexible teaching lab, used mainly to teach biology and environmental science courses.
Beyond this, Pace is part of a collaboration with The Trust for Governors Island to create a climate solutions center on the 172-acre island in New York Harbor. As a core partner in The New York Climate Exchange, Pace is contributing to a new international center for developing and deploying solutions to the climate crisis and engaging New Yorkers in the green economy.
“We expect continued growth among first-generation, transfer, and graduate students and have experienced significant increases in our graduate enrollment at the Seidenberg School of Computer Science and Information Systems,” says Pace University President Marvin Krislov.
High interest rates put a crimp in commercial lending in 2023, but with The Fed finally holding rates from 5.25 to 5.5 percent for its two most recent meetings — the highest rate in 2022 years — bankers were optimistic that business would pick up. “If things continue the way they’re going, I think that will help open things up a bit,” says Joe McCoy, Valley’s market president for commercial banking, Hudson Valley & Fairfield, CT.
In the meantime, many banks reported healthy balance sheets, despite a reluctance among businesses to borrow. “The overall health of our banks and financial institutions is actually very strong, and the balance sheets for our regional banks are healthy. Theyʼre looking to lend, but loan demand, itself, is an issue,” says Michael Romita, president of the Westchester County Association. “It’s particularly challenging in the commercial-office real-estate sector. It’s also more difficult to determine the credit quality of new projects. There’s a lot of uncertainty in the market as existing commercial-office loans roll over. You layer on top of that uncertainty in the federal banking-regulation market and thatʼs making the lending environment for banks a bit more difficult, even though they are straightforward that they are looking to lend.”
That said, the failure of three smaller regional banks — Signature Bank and Silicon Valley Bank, and Chase’s acquisition of the failing First Republic Bank — sent shockwaves through the regional banking community and drove some commercial customers to the big banks, making it more challenging for smaller banks to compete. “Community banks and smaller regional banks continue to work not just to support our clients, but are looking for new clients to bring on businesses to expand,” says McCoy.
On the consumer lending front, John Tolomer, president and CEO of The Westchester Bank Holding Corp, reported that some consumers are hesitant to take on home loans. “If you have a homeowner, they might get cold feet when they see what it will cost them,” says Tolomer. That’s not to mention the challenges of finding a buyer who may want to trade up but does not want to get a 3-percent mortgage. “There is less inventory,” he says. “It’s a tough market for that.”
In this environment, banks are enhancing other offerings, such as private-banking services. “It’s about taking care of your customer,” says Tolomer.
Commercial Real Estate
When it comes to commercial real estate, 2024 will be a “big question mark,” says Garry Klein, managing director of the Houlihan Lawrence Commercial Division. In 2023, the steep rise in interest rates by The Fed slowed deal volume, and that put many deals on hold — for now, he says.
“For a lot of development deals and investment sales we were hoping to do, the financing went sideways, where either the lender is taking a harder look at the asset and giving the purchaser less on the long-term value, or charging an interest rate that is not going to make that project or sale really palatable to the purchaser,” Klein says.
In the current business environment, commercial transactions have declined across all property types, according to the Houlihan Lawrence Q3 Commercial Market Report. However, some sectors are faring better than others — and those trends are expected to continue soon.
Multifamily and industrial markets have been performing well, Houlihan Lawrence found in its report. Vacancies in multifamily buildings have remained around 4 percent, with rents increasing in most buildings over the past three years, the report notes. The market has absorbed 1,500 new units in the last three quarters and 6,400 units over the last three years.
“Pretty soon industrial is going to be hand-in-hand with office pricing, which is kind of crazy.”
—Sarah Jones-Maturo, President, RM Friedland
Industrial rents ticked up 7 percent in the most recent quarter, Houlihan Lawrence found. Asking rates in the county averaged $18.83 per square foot, according to RM Friedland’s Westchester Industrial Leasing Q3 Market Report 2023. Availability was just 5.78 percent in Q3, with the lowest availability in the county along the I-95 corridor, RM Friedland calculated. Although most of the activity took place in smaller deals, one of the quarter’s largest transactions was the 110,000-squarefoot lease at 250 Sanford Boulevard in Mount Vernon to ReadySpace. “Availability rates continue to drop, and there are historically low vacancy rates, and that’s pushing pricing upwards,” says Sarah Jones-Maturo, president RM Friedland, based in Harrison. “Pretty soon industrial is going to be hand-in-hand with office pricing, which is kind of crazy.”
As many expected, the office sector continues to struggle, with vacancies at the highest levels in three years as the remote-work trend continues and the low number of transactions makes it hard to accurately determine asset values. Landlords of Class A buildings who invest in high-quality amenities, such as fitness centers, cafés, covered parking lots, and conference centers, will fare better, according to Rachel Greenspan, senior director, GHP Office Realty, LLC, in White Plains. “These offerings allow the Class A buildings to maintain strong occupancy numbers,” says Greenspan.
On the other hand, older office buildings are facing departures from tenants looking for new amenities, and are sometimes having to convert outdated buildings to residential, industrial, and medical. “Many buildings in the Westchester market are being taken out of service due to ownership’s lack of capital stack or desire to continue operating in the office space,” Greenspan says. “It has become clear over the past few years that the buildings receiving care, attention, and investment from management are the most successful. Tenants are looking for the reassurance their office building can withstand financial crises. The ability for an owner to take care of their property plays a large [role] in the tenant’s decision to relocate or renew in their existing office space.”
One other option for the office market, given today’s prices, will be for local businesses to purchase them at attractive prices as a home for their operations, and rent out part of the buildings to other businesses, says Houlihan Lawrence’s Klein. “It’s a little bit of a silver lining,” he says.
Healthcare equity has been top of mind for the region’s healthcare institutions since the pandemic raised awareness — and the push to enhance it will continue in 2024. That’s been the case at Westchester Medical Center Health Network (WMCHealth). “We approached this by increasing healthcare access via partnerships with healthcare providers across the community, thus…bringing our physicians and specialists directly to residents through community health organizations,” says Josh Ratner, executive vice president and chief strategy officer at WMCHealth.
In one such collaboration, WMCHealth announced a new community partnership with Andrus in Yonkers to advance mental-health services in Westchester. WMCHealthʼs behavioral-health physicians are working with children and adolescents at the Andrus residence and Orchard School in Hastings/Yonkers, which serve a combined 150 students, and at Andrus’ two community-based clinics, which serve more than 5,000 individuals of all ages.
“We have work underway right now to try to bring additional pediatric and adult behavioral-health resources up into Westchester.”
—David Seligman, Deputy Regional Director, Northwell Health Western Region
WMCHealth has also partnered with Westchester Community Health Center, allowing residents to see the network’s physical-medicine doctors and orthopedic surgeons at this location in Mount Vernon. To address gaps in maternal care, the network has established the WMCHealth Center for Women’s Health Equity based out of Westchester Medical Center in Valhalla, and WMCHealth’s HealthAlliance Hospital, in Kingston, to reduce the leading causes of death among pregnant women. Specialists in maternal-fetal medicine will work with the network’s heart and vascular program clinicians to take a more proactive and holistic view of elevated risk factors among women, with an emphasis on the needs of women of color.
The network plans to engage with additional community partners to increase health equity in the community, strengthen WMCHealth’s stroke-care services, and expand its behavioral-health services, according to Ratner. It will also be moving ahead on the construction of the new Critical Care Tower at Westchester Medical Center, in Valhalla. This, says Ratner, “will expand coverage and provide more comfortable modern facilities for patients, while having the ability to head-off future critical-care shortages, like those that arose during the pandemic.”
White Plains Hospital (WPH) is also prioritizing health equity through the 31 locations in Westchester County where it provides routine and advanced care, and is placing increased emphasis on proactive outreach to its recently discharged patients.
“Our innovative WPH Cares Program supports patients beyond their hospital stay to help remove obstacles to follow-up treatment, coordinate overall care, and promote optimal well-being,” says Dr. Michael Palumbo, executive vice president and chief medical officer, White Plains Hospital. “One of the main factors affecting access to care is social determinants of health, and, as such, we have developed a plan to maximize data collection to collect race, ethnicity, preferred-language, sexual-orientation, and gender-identify information. [This] allows us to enhance treatments for medically underserved populations.”
In 2023, White Plains Hospital introduced a new neurosciences program, where its specialists perform complex neuro procedures including mechanical thrombectomies, considered the gold standard in stroke treatment. It also expanded on its advanced cardiac services, adding its new Structural Heart Center to complement its cardiac surgery, electrophysiology (EP) and interventional cardiology programs. The hospital is now performing transcatheter aortic-valve replacements, a minimally invasive cardiac procedure, at WPH and in conjunction with partners at Montefiore Einstein.
In 2024, White Plains Hospital will open its new Kleinman A-Fib Center, including the construction of a third Cath lab, with all the latest technologies to perform advanced EP procedures. The network’s EP physicians are now part of two research studies, including one at Duke University, and another National Institute of Health study at Northwestern University, which utilizes the Apple Watch to observe how Afib impacts patients.
All told, says Palumbo, “The impact on the community will be significant as we provide the people of Westchester County with state-of-the-art facilities and the most qualified physicians to care for this growing health concern.”
At Northwell Health, community behavioral health, particularly in the pediatric sector, will continue to be a priority in 2024, according to David Seligman, deputy regional director for Northwell Health’s Western Region. “As kids have come through the pandemic, you see the effects of cyber bullying and social distancing,” says Seligman. “We have work underway right now to try to bring additional pediatric and adult behavioral-health resources up into Westchester, and we’ve had tremendous support from a number of philanthropic sources in this effort that we look forward to talking more about as it becomes more formal.”
Northwell Health also has a major focus on sustainability for 2024. With its infrastructure investments in Westchester, for instance, the network is taking a look at how it will impact the power grid, and is prioritizing the search for vendors who embrace sustainability. “We’ve put a major emphasis on sourcing fresh local food, which we serve in our hospitals,” says Seligman. “We’ve partnered with a number of local farms and will continue to do more of that.”
To make sure healthcare employers have the expertise they need on staff, Westchester’s Healthcare Talent Pipeline has created an asset map of the healthcare-education programs available in the county to provide this information to HR professionals in institutions with a Westchester presence. The information gathered will appear in the Westchester County Associaton’s Healthcare Jobseeker Guide, which contains data on in-demand healthcare jobs, training providers and programs, and employers in this industry sector.
This asset map is the result of collaboration through meetings, such as a recent roundtable between presidents of higher-education institutions and CEOs of healthcare networks, according to Michael Romita, president of the Westchester County Association. “If, for instance, I need a phlebotomist or a registered nurse practitioner, they know that these are the education institutions that are turning out these kinds of students,” says Romita.
Northwell Health is also moving ahead on partnerships with local school systems through events, such as talks on healthy eating, hoping some of the programming will interest young people in STEM careers in healthcare. Says Seligman, “We view them as future healthcare workers.”
The arts have come roaring back to life in Westchester. Events such as JazzFest and Tarrytown Music Festival, and entertainment venues, like The Capitol Theatre in Port Chester, The Picture House Bronxville, and Jacob Burns Film Center, in Pleasantville, are going strong, aided by the vibrant restaurant scene in the county, says Marsha Gordon, president and CEO of the Business Council of Westchester. “People come to Westchester because of our quality of life here, and the arts are very much a part of that,” says Gordon.
One bright spot this past fall was the groundbreaking of a $100-million studio campus for Lionsgate Studio in Yonkers. The 20,000-square-foot studio, with its 12 soundstages, is expected to create about 400 jobs. Great Point Studios, the owner of Lionsgate, has already partnered with the S.I. Newhouse School of Public Communications at Syracuse University to create a filmmaking course, training cinematographers and other professionals. “That’s economic development at its best,” says Gordon.
“[Residents] don’t want to travel, so they’re looking for things in their own backyard.”
—Janet Langsam CEO, ArtsWestchester
All this activity is having a real impact on the local economy — one that is expected to continue in 2024. ArtsWestchester just calculated that the economic impact of the arts in the county has reached $182.3 million, creating 2,240 jobs that generated $120.7 million in income for workers and $33.9 million in local, state, and federal tax revenue. Total attendance at in-person events was more than 22.4 million, with the average expenditure per person hovering a little over $27.
The survey found that many residents are looking for entertainment in their own community, with 85 percent saying they would feel a great loss if the activity were no longer available. “They don’t want to travel, so they’re looking for things in their own backyard,” says Janet Langsam, CEO of ArtsWestchester.
Langsam expects the growth to continue, thanks, in part, to the state giving $1 million in grant funding to the arts for the past three years. The nonprofit is using $1 million in funding from the New York State Council on the Arts to enhance access for the disabled to its performance and gallery space. “It’s a big thing for us,” says Langsam.
Manufacturing is one of four industries Westchester County has prioritized in the Westchester Workforce Development Strategy — the others are life sciences, clean energy, and technology. A task force from the advanced-manufacturing sector meets quarterly to tackle pressing issues, such as the ongoing labor shortage: “They, along with pretty much every sector in the county, struggle to find workers,” says Bridget Gibbons, director of economic development for the county.
One reason is that as manufacturing has become more tech-driven, many entry-level workers lack the skills to enter the field. One outcome has been a collaboration with Westchester County Community College to train high-school graduates with entry-level manufacturing skills, and familiarize them with 3D printing and other tech-driven skills. “The training is really focused on safety and quality control,” says Gibbons.
“They, along with pretty much every sector in the county, struggle to find workers.”
—Bridget Gibbons, Director, Westchester County Office of Economic Development
Workforce housing is another priority for building out the sector — one that the growth of multifamily county housing may help to alleviate. “A theme that runs across the industrial sector is the thirst for talent, and workforce development continues to be a challenge. Part of that is because it’s incredibly expensive to live here. Without enough workforce housing, we’re losing workers to places outside of the state,” says Michael Romita, president and CEO of the Westchester County Association.
With the industrial sector heavily energy-dependent, there have been more efforts to modernize the county’s power grid. One of them is Clean Path NY, a renewable energy infrastructure project that projects the creation of 8,300 jobs.
“Reliable, resilient power is the backbone of a growing economy,” says Amy Varghese, vice president of external affairs at Clean Path NY. “Clean Path NY is one of the largest renewable-energy infrastructure projects developed in New York in 50 years, and it will modernize the state’s electric grid to help ensure our energy system is ready to support strong businesses and strong neighborhoods in Westchester and across New York.”
Manufacturers were challenged by the high interest-rate environment in 2023, which impacted customers’ ability to make capital equipment purchases. But with The Fed freezing interest rates at the end of 2024, cautious optimism returned to the sector.
“Higher interest rates have definitely had a cooling effect on our business, especially in the first half of the year,” says Don Vibbert, CEO of ImageWorks, an Elmsford-based maker of panoramic and 3D-imaging technology for dentists’ offices. “In the second half of the year, it has been much better. As things became a little less uncertain, our customers knew what the market was going to look like and that caused moving forward with purchases that they might have delayed in the first half.”
Westchester’s retail market has recovered in a big way since the pandemic, and that rebound is bringing new life to the county’s shopping malls and local downtowns — a trend that industry professionals expect to continue in 2024.
“The reckoning for retail space seems to have occurred,” says Sarah Jones-Maturo, president of RM Friedland, based in Harrison. “The market seems to have recovered and reset following the effects felt by the ecommerce boom and COVID; and after the vacancy rate recovered, we have had a long period of sustained equilibrium statistically, with both vacancy rates and asking prices remaining relatively flat for a 36-month period. Experiential demand is back and continues to be a driving force for the big-box vacancies left behind by ecommerce casualties like Bed Bath & Beyond.”
Malls, particularly the higher-end ones, are seeing an uptick in foot traffic. “The Westchester has seen fantastic growth throughout 2023,” says Maria Gregorious, director of marketing for The Westchester. This past year, she notes, the mall opened nine new stores including Melissa & Doug (the brand’s first retail location worldwide), Venchi, LoveSac, Sur La Table, Talbots, Lids, Foot Locker, Casper, and Sugar Bear.
“We are optimistic that the tremendous momentum from this past year will continue into 2024, and have some exciting store openings to announce in the coming months,” she says. “We anticipate sustained growth driven by innovative, trendy brands that cater to a range of demographics.”
A main focus for the new year will be supporting community programming and actively assisting local organizations, with the goal of “making our space a vibrant hub that nurtures connection and engagement with the community,” she says.
At the same time, the boom in residential multifamily construction is bringing more shoppers to downtown business districts. “As goes residential development, so goes retail,” says Bridget Gibbons, director of economic development for the county. “When we have seen transit-oriented development done the right way, retail has followed.”
One case in point: Avalon Harrison, a recently completed development at the Harrison Metro-North train station. “What followed were cafés, coffee shops, and other retail,” says Gibbons.
One bright spot on the big-box-retail front was the opening of a Target store at the Cross County Center in Yonkers in October 2023, not long after Target announced the closure of nine stores across the US. “I was there for the grand opening, and to see the excitement of the employees, all of whom were hired from the community, was absolutely thrilling,” says Marsha Gordon, president and CEO of the Business Council of Westchester. “The fact that Target, while theyʼre closing stores in other areas, has chosen to open a brand-new beautiful store in Yonkers says a lot for the state of retail in Westchester.”
That said, retail still hasn’t stabilized completely since the pandemic. Retail leasing has gotten weaker overall, with only one-third of the leasing volume of the past three years, Houlihan Lawrence found in its Q3 Commercial Market Report. One significant third-quarter development was Danone’s listing of about 65,000-square-feet of office and retail space in The Source, a multistory retail complex in White Plains.
However, at Houlihan-Lawrence, Garry Klein, managing director of the Houlihan Lawrence Commercial Division, remains optimistic that shoppers are craving in-person retail experiences, and reports that demand has been ticking up recently. “You still have a lot of products that donʼt really translate to Amazon,” says Klein. “People want to try things on, see them and purchase them in person. Weʼre seeing a pretty good demand for retail, both in terms of shopping plazas and downtowns.”
Residential Real Estate
With mortgage rates at a two-decade high in Q3 and the average rate for a fixed-rate mortgage at 7.83 percent, and inventory in Westchester County low, sales for residential real estate in the county have been slowing. The number of closed sales — 4,002 — was down 24.3 percent in October 2023, according to the Hudson Gateway Association of Realtors (HGAR). “We’re in a period of adjustment now,” says Mary Stetson, licensed real estate broker at Stetson Real Estate in Mamaroneck. “There were a lot of cash offers or no-mortgage-contingency offers through last spring and last summer, but the velocity of cash buyers has been dwindling a bit. Even though interest rates are going to stabilize, I believe we’re going to see a pullback a little bit in the market.”
Some communities were hit harder than others. Houlihan Lawrence found that the number of single-family-home sales in 2023 was down 16 percent in New Rochelle, 18 percent in Mount Vernon, 23 percent in Pelham, and 24 percent in Yonkers in Q3, in its Westchester, Putnam, Dutchess Market Report Q3-2023.
Meanwhile, inventory was low, with sellers cautious about letting go of their properties because of the high interest rate associated with buying a new home. New listings were down 25.1 percent from Q3 2022 to 1,272 in Q3 2023. “People thinking about whether they want to sell are thinking, ‘Gee, I’m locked into that 3 percent interest rate, so why would I sell?’” says Stetson. She is cautioning sellers that there could be a decline in home sales in the coming year, and they may be better off selling while the market is high than waiting and losing some of the value of their homes.
The limited inventory has shrunk options for would-be home buyers, and bidding wars have pushed the median sale price for a single-family home in the county to $851,250 in October 2023, up 3.2 percent from the same month in 2022, according to HGAR. “Homes spent the lowest amount of time on the market in years, attributed to ready, willing, and able buyers and a large percentage of cash purchases,” says Liz Nunan, president and CEO of Houlihan Lawrence, in the firm’s market report.
The absence of single-family-home inventory is propelling multifamily development. “There is a tremendous need for housing of all kinds, in particular, affordable housing, so residential and mixed-use real estate continues to be very hot,” says Michael Romita, president and CEO of the Westchester County Association. “There’s an insatiable demand for anything from urban apartment towers to low-rise apartments to townhomes to single-family developments.”