As one would expect, each quarter is a near “mirror image” of the previous quarter. There has not been any significant change in the economy that would have an effect on the Long Island real estate market. The leasing and sale activity has continued at a similar pace, over last quarter, with a slight but insignificant increase in activity. The transactions continue to take an inordinate amount of time to complete. If the market has stabilized then it is safe to assume we may begin to see an increase during the next few quarters.
Landlords, wrestling with the market and their property/portfolio balance sheets have been seeking to add value with minimal results. Although we have begun to see some small increase in asking rents, rent concessions and tenant’s improvements have helped to offset the increase. As long as sublease opportunities continue to hit the market the landlord’s ability to increase rental rates will be undermined. The office leasing sector has continued with a near zero absorption (as space is leased more hits the market). The sublease market has stabilized to some degree with old space being subleased as the newer units hit the market. The industrial sector continues to outperform the office sector. Most of the economists on Long Island have forecast 2013 to be another difficult year with minor overall improvement in the commercial real estate market.
The changes from last quarter have been minor, so there have not been widespread adjustments in the asking rents. Rental concessions continue to be an area Landlord’s have shown a willingness to offer as an inducement. Sublease space continues to cause some overall vacancy rates to remain higher than our market is accustomed to. Recovery continues to be a slow as direct space and sublease space continues to enter the market.
|Broadridge Financial||700,000 sf||Office||Lease|
|Onyx Equities||235,000 sf||Office||Sale $123/sf|
|495 Holdings||25 acres||Land||Sale $255,000/acre|
|NY Community Bank||160,000 sf||Office||Sale $75/sf|
|Wal-Rich Plumbing||50,500 sf||Industrial||Sale $91/sf|
- Slow recovery to continue with little upside potential for the beginning of the second quarter of 2013
- Asking rents may increase slightly although offset by increased rental concessions
Average Rental Rates