Long Island Office Market
Following COVID-19, the Long Island region continued to see the trend of rising vacancy rates in the third quarter of 2023. Negative net absorption persisted through the quarter as there is limited demand for suburban office markets. While sublease availability continued to rise, the overall availability in the Long Island market decreased as direct space available fell 168,320 square feet in the third quarter of 2023. Despite this, vacancy still rose to 12.3% in the third quarter, up 0.8% from the third quarter of 2022. While the average asking rent of Class A office space slightly declined in the third quarter of 2023, the gap between Class A and B asking rents is still considerably larger than 2022.
Long Island Industrial Market
Third quarter vacancy increased 20 basis points to 4.5%, largely driven by a delivery of four properties totaling 291,000 square feet of vacant space in the quarter. Industrial leasing activity fell sharply in the third quarter of 2023. Down 42.5% from the second quarter of 2023 as the third quarter leased just 780,738 square feet of industrial space. Industrial average asking rents grew by 6.8% over 2022 measures, recording average asking rates of $17.59/SF in the third quarter.