The sun, the stars and the moon are all in alignment for the economy to continue its strongest growth since 2003. The evidence is the GDP rising significantly at the end of 2013. Corporate profits and the stock market hitting record highs; consumer demand, exports and retail rising. Unemployment has dropped to 6.7% and the housing market continues to improve. Surprisingly, inflation remains very low.
The impact of the economy on the national office market has been a slow and steady improvement. Vacancy has fallen to 11.5% and rental rates have risen to $22.06. Net absorption has continued positive for the eighth straight quarter.
The Long Island economy is more than keeping pace. Unemployment has fallen to 5.1% and the housing market continues to improve. Long Island consumer confidence has risen to 5.6, its highest level since 2007.
This positive economic news has not yet had an impact on the Long Island commercial office market. The vacancy rate for Nassau and Suffolk counties is unchanged for two consecutive quarters. The average asking rent rose a scant 0.1%. Net absorption was negative for the first time in 6 quarters.
What does this mean for Long Island office tenants? Life is good! Landlords are continuing to be aggressive to acquire good companies as tenants. Most companies can create negotiating leverage to get low rents, long concession periods and upgraded workletters. With business confidence up and rental rates down, growing companies are finding the constellations are all in perfect alignment.
Contact Ross Selinger to utilize his 27 years of experience creating negotiating leverage.