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News release

MELVILLE, NY

Jones Lang LaSalle Reports 4-Year High in Long Island Leasing Activity at Year-End 2013

Employment growth, boost in transaction volume throughout Long Island fuel lowest overall vacancy rate in past 5 years


MELVILLE, NY, February 4, 2014 — Jones Lang LaSalle noted the Long Island office market continues to pick up steam after several years of slow but steady growth. Space users have ramped up leasing activity, accelerating transaction volume, pushing down vacancy rates and fueling moderate growth in average asking rental rates throughout the area.

“This past year represented a major turning point for Long Island, with the market benefitting greatly from rising employment and strong transaction volume,” said Raymond Ruiz, executive vice president and head of the firm’s Long Island office. “Long Island’s office market posted the lowest vacancy rate we’ve seen in the past five years and leasing activity has reached a four-year high. Companies seeking aggressive leasing options can still find them in all submarkets across the island.”

The healthy market fundamentals have driven Long Island’s overall vacancy rates down to the lowest point seen in the past five years. Long Island’s overall vacancy rate fell slightly to 16.8 percent in the fourth quarter of 2013, a decrease of less than 1.0 percent (or 0.1 percentage points) from 16.9 percent one year earlier. The island’s Class A vacancy rate grew to 17.2 percent this quarter, an increase of 3.6 percent (or 0.6 percentage points) from 16.6 percent at year-end 2012.

Long Island has seen steady improvement in leasing activity, and is approaching levels not seen in four years. The market posted more than 2.2 million square feet of completed leases in 2013, a significant improvement compared with slightly more than 1.7 million square feet in 2012, but still short of the 2.8 million square feet recorded in 2010. Long Island tenants appear to be signing more new direct deals as sublet activity has decreased approximately 65 percent in the past year, to about 50,000 square feet from around 140,000 square feet at year-end 2012.

Overall rents in Long Island declined less than 1.0 percent to $26.12 per square foot in the fourth quarter of 2013 from $26.20 per square foot one year earlier. The county’s Class A rents grew to $29.93 per square foot, an increase of 2.5 percent from $29.21 per square foot at year-end 2012.

Nassau County
Nassau County continued to draw the lion’s share of tenant interest during the past year, claiming approximately 55 percent, or 1.1 million square feet, of all transactions completed on Long Island in 2013. The county’s overall vacancy rate fell to 16.2 percent in the fourth quarter of 2013, a decrease of 3.6 percent (or 0.6 percentage points) from 16.8 percent one year earlier. Nassau County’s Class A vacancy rate grew to 16.6 percent this quarter, an increase of 1.2 percent (or 0.2 percentage points) from 16.4 percent at year-end 2012.

Overall rents in Nassau County rose less than 1.0 percent to $28.12 per square foot in the fourth quarter of 2013  from $27.98 per square foot one year earlier. The county’s Class A rents grew to $31.05 per square foot this quarter, an increase of 1.9 percent from $30.48 per square foot at year-end 2012.

Suffolk County
Suffolk County reported a steady rise in vacancy rates toward the end of the year, fueled mainly by Allstate Insurance Co.’s decision to vacate four separate buildings in Hauppauge. The insurer is consolidating its regional headquarters operations into an 80,000-square-foot, Class A office building under construction at 898 Veterans Memorial Highway. The county’s vacancy rate is expected to remain at elevated levels through 2014.

Suffolk County’s overall vacancy rate rose to 17.8 percent in the fourth quarter of 2013, an increase of 4.1 percent (or 0.7 percentage points) from 17.1 percent one year earlier. Class A vacancy rate grew to 18.2 percent this quarter, an increase of 6.4 percent (or 1.1 percentage points) from 17.1 percent at year-end 2012.

Overall rents in Suffolk County remained flat at $23.57 per square foot in the fourth quarter of 2013 from $23.56 per square foot one year earlier. Class A rents grew to $27.79 per square foot, an increase of 3.3 percent from $26.89 per square foot at year-end 2012.

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JLL is a leader in the New York tri-state commercial real estate market, with more than 1,600 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2012, the New York tri-state team completed approximately 23.8 million square feet in lease transactions, arranged capital markets transactions valued at $1.57 billion, managed projects valued at nearly $7.0 billion, and oversaw a property and facilities management portfolio of 102.1 million square feet and an agency leasing portfolio of 76.0 million square feet.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4.0 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 3.0 billion square feet. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. For further information, visit www.jll.com.