Long Island Office Market
Following COVID-19, the Long Island region continued to see the trend of rising vacancy rates in the fourth quarter of 2023. Negative net absorption persisted through the quarter as there is limited demand for suburban office markets. Available direct space increased 149,273 square feet in the fourth quarter of 2023. As the sublease available space decreased by 62,709 square feet, the total space available increased by 86,564 square feet. As a result, vacancy rose to 12.4% in the fourth quarter, up 0.9% from the third quarter of 2022. While the average asking rent for Class A office space grew slightly in the fourth quarter of 2023, Class B asking rents increased 8.5% since the previous quarter. High-priced sublease rates persisted through the fourth quarter, with the average sublease rate increasing to $35.63, a 19.0% increase year-over-year.
Long Island Industrial Market
2023 vacancy increased to 4.5%, largely driven by a delivery of over 447,000 square feet in the past two quarters. As construction deliveries continue to outpace net absorption, vacancy is expected to rise over the next few quarters. Following a significant decline in leasing activity in the third quarter of 2023, the fourth quarter experienced a slight rebound, increasing 12.5% from the previous quarter. The fourth quarter’s 878,321 square feet leased is down 35.5% from the second quarter’s high of 1,357,487 square feet. Industrial average asking rents grew by 2.9% over 2022 measures, recording average asking rates of $16.95/SF in the fourth quarter.
Download Long Island Industrial Market Report 4Q23