The US economy continued its mixed trend of good news and bad news. Unemployment is holding steady at 4.7% followed by modest growth in wages. The GDP increased an anemic 1.95% for 2016 but Consumer Confidence hit new highs and housing had its best year since the crash of 2008.
This news is reflected in the national office market as the vacancy rate has continued to tighten to 9.7%, net absorption continued its positive trend, (net absorption is the difference between space being leased and new space coming on the market), and the average asking rent rose to $25.42.
The “CBDs”, (Central Business Districts), continued to outpace Suburban Markets for A & B office buildings. The difference in rent is significant: CBDs – $32.59 versus Suburbs – $23.70. This is due to spiking demand caused by Millennials flocking to the cities and Corporate America following.
The Long Island economy continued to stay ahead of the national economy with unemployment remaining below 4%. The overall vacancy rate for Nassau and Suffolk is 7.5% and the average asking rent is $25.83, (Long Island is a suburban market). The Nassau A & B buildings weighted average for asking rents significantly outpaced Suffolk: Nassau – $29.11 PSF versus Suffolk – $23.75 PSF.
The tightest market on Long Island is Lake Success/New Hyde Park. Its 5.5% vacancy rate is very tight especially considering its 5 year average is 9.3%. Its average rent is $32.84 also higher than its 5 year average of $32.10. This is due to the constant demand for this area by users of medical space and its easy access to Queens, the airports and NYC. This largest construction development on Long Island is taking place in this market. A 233,000 square foot building is presently under construction at the corner of New Hyde Park Road and the LI Expressway for Dealer Track Technologies, Inc.
Heading East we see vacancy rates increasing and the average asking rents decreasing. Melville remains the softest market on Long Island with a vacancy rate of 11.9%, (higher than its 5 year average of 10.8%) and an average asking rent of $26.89, (lower than its 5 year average of $28.11).
Long Island Office Market Statistics
|Market||Vacancy||Asking Rent||Major Cities|
|Western Nassau||6.0%||$31.73||Lake Success, New Hyde Park, Roslyn, Port Washington|
|Central Nassau||7.1%||$28.46||Garden City, Mitchel Field, Uniondale, Mineola|
|Eastern Nassau||7.9%||$26.77||Jericho, Woodbury, Syosset, Plainview, Bethpage|
|Western Suffolk||9.2%||$24.30||Melville, Huntington, Hauppauge, Islandia|
|Central Suffolk||7.2%||$28.46||Bohemia, Holbrook, Ronkonkoma,|