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News release

MELVILLE, NY

Pent-Up Demand Fuels Recent Leasing Activity on Long Island

JLL reports rise in deal velocity causes drop in Nassau County vacancy rates, boosts average asking rental rates throughout market at mid-year 2015


MELVILLE, N.Y., August 6, 2015 — Long Island continued to witness an increase in leasing activity in the second quarter of 2015 that began earlier this year. Deal velocity remains above levels not seen on the island in at least a year as pent-up demand fueled a surge in new deals. The ongoing increase in deal volume has pushed vacancy rates down and boosted rental rates throughout the market, according to JLL.

“There has been a big uptick in demand from a broad range of tenants throughout Long Island,” said Raymond Ruiz, Executive Vice President and head of the firm’s Long Island office. “The traditional sectors that drive demand for space in the Long Island office market —professional, business and financial services— added more than 3,000 jobs during the past few months. The accelerated growth demonstrated by these vital sectors will only help strengthen the Long Island office market.”

Long Island posted approximately 908,162 square feet in leasing activity in the second quarter of 2015, easily surpassing the 290,000 square feet seen during the same quarter one year ago. Fueled by strong leasing activity, Long Island witnessed 267,200 square feet of positive net absorption in the second quarter of 2015, compared with 131,527 square feet one year earlier.

Long Island’s high-end space remained the product of choice for office tenants, with Class A space accounting for nearly 148,000 square feet of this quarter’s positive absorption. Companies are migrating to the market’s better spaces to help retain and recruit new employees. A large portion of recent Class A leasing activity was focused in Nassau County, where 278,400 square feet was absorbed during the first half of 2015. Nassau County’s Class A vacancy rate declined from nearly 16.0 percent in 2014 to 13.3 percent in mid-2015 as leases involving GEICO, PSE&G, Purolator Inc. and Sanef ITS Americas Inc. contributed to the lower vacancy rate seen during the past six months.

The only project underway on Long Island in the second quarter of 2015 was Dealertrack Technologies' new 232,000-square-foot headquarters at 3400 New Hyde Park Road in North Hills. The property was pre-leased to Dealertrack, which will occupy the entire building.

Highlights of the second quarter of 2015 include:
• Long Island’s Class A vacancy rate fell to 15.4 percent in the second quarter of 2015, a 30 basis point decline from one year ago. Nassau County’s Class A vacancy rate declined to 13.3 percent, compared to 14.3 percent at mid-year 2014. However, Suffolk County’s Class A vacancy rate rose from 18.3 percent one year ago to nearly 19.0 percent.
• Average asking Class A rents for direct space on Long Island increased to $30.00 per square feet compared to $29.81 per square foot one year earlier. Nassau County Class A rents have remained near the $31.80 per square foot level for the past year, while Suffolk County Class A rents grew to $27.40 per square foot, compared to $26.67 per square foot one year ago.

For more news, videos and research resources from JLL, please visit the firm's U.S. media center Web page. Bookmark it here: http://bit.ly/18P2tkv.

JLL is a leader in the New York tri-state commercial real estate market, with more than 2,000 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2014, the New York tri-state team completed approximately 22.8 million square feet of lease transactions, arranged investment sales transactions valued at more than $5.4 billion, managed projects valued at $7.6 billion, and oversaw a property management, facilities management and agency leasing portfolio exceeding 163 million square feet.

About JLL
JLL (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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.