Long Island Office Market
Despite positive absorption of 262,329 square feet during the first quarter, two consecutive quarters of negative absorption has brought the 2024 total to negative 35,443 square feet. The negative yearly absorption coincides with a heightened vacancy rate of 12.6%, a 20-year high. Total available space decreased 6,282 square feet during the third quarter of 2024 due to a decline in available sublease space.
The Long Island average asking rent decreased 2.4% to $28.50. Asking rents remain 5.4% above the long-term average of $27.71. The third quarter of 2024 saw an elevated spread between sublet and direct rates. Sublease rates remain high as they have increased 9.6% from the previous year while direct rates have decreased 2.5%.
Long Island Industrial Market
In 2024, Long Island total vacancy increased to 5.5% due to the delivery of ten properties totaling 1,620,469 square feet. Although Long Island leasing activity increased 3.3% from the previous quarter to 683,177 square feet, it still recorded its second lowest quarterly level in the past five years. Despite a marginal year-over-year decrease, average asking rents remain elevated at $16.80/SF in the third quarter of 2024. The third quarter recorded a 39.1% increase in asking rents compared to the onset of the pandemic. Through the first three quarters of the year, 2024 outpaces 2023 class A leasing activity by 11.2%. Class A’s share of total industrial leasing remains heightened at 12.1%, the second highest rate over the past 15 years.