Skip Ribbon Commands
Skip to main content

News release

MELVILLE

Long Island’s Overall Vacancy Rate Remains at Lowest Level in More Than 5 Years

Market recorded fourth consecutive quarter of falling overall vacancy rates; drops to 14.3 percent in 3rd quarter of 2016


MELVILLE, NY, October 20, 2016 — Long Island recorded its fourth consecutive quarter of falling overall vacancy rates in the third quarter of 2016, according to JLL. The market's overall vacancy rate fell to 14.3 percent in the third quarter of 2016, a decrease of 11.2 percent (or 180 basis points) from 16.1 percent one year ago. Long Island's overall vacancy rate fell every quarter since year-end 2015, when it posted an overall vacancy rate of 16.8 percent at year-end 2015.

"Flight to quality throughout Long Island has left a limited supply of large Class A availabilities in the market, particularly in the Western and Central Nassau submarkets where the relatively low vacancy rates remain in the low teens amid heightened demands," said Raymond Ruiz, Executive Vice President and head of the firm's Long Island office. "The continued run of strong performance throughout Nassau County was largely due to consistent demand in recent months as businesses continued to shift east in search of larger blocks of space."

Approximately 280,000 square feet of office space was leased throughout Long Island during the third quarter of 2016, nearly matching the 300,000 square feet during the previous quarter. The market recorded approximately 1.3 million square feet of leasing activity year-to-date, putting Long Island on track for the lowest level of deal volume since 2012.

Although leasing volume remained slow in the third quarter of 2016 compared with recent years, Long Island posted a total of 33,000 square feet of positive net absorption, following nearly 510,000 square feet of positive net absorption just three months prior. Approximately 60.0 percent of the total absorption was focused in the Central Suffolk submarket. Net absorption has remained positive in Long Island since 2014. 

Companies looking to expand on Long Island have begun to seek availabilities in Suffolk County. LBI Software, for example, plans to relocate from its current office at 7600 Jericho Turnpike in Woodbury to 999 Walt Whitman Road in Melville. The software firm will occupy 9,000 square feet of space and expand as the company grows.

Numerous significant transactions closed in Nassau County in the third quarter of 2016. Mount Sinai Health System took 30,000 square feet at 1155 Northern Boulevard in Manhasset, ShelterPoint Life Insurance Co. leased approximately 18,000 square feet at 1225 Franklin Avenue Plaza, and Moritt Hock & Hamroff LLP renewed 31,500 square foot at 400 Garden City Plaza in Garden City. In addition, Merrill Lynch Wealth Management renewed 28,522 square feet at 1305 Walt Whitman Road in Melville.

Highlights of the third quarter of 2016 include:

  • Long Island's Class A vacancy rate dropped to 12.9 percent in the third quarter of 2016, a decrease of 9.8 percent (or 140 basis points) from 14.3 percent one year ago. Year over year, Nassau County's Class A vacancy rate declined to 9.8 percent this quarter from 12.7 percent. Suffolk County's Class A vacancy rate rose to 18.5 percent this quarter from 17.2 percent one year ago.
  • Average overall asking rents for Class A space on Long Island dropped to $29.80 per square foot in the third quarter of 2016, a year-over-year decrease of 1.2 percent from $30.15 per square foot. Nassau County Class A rents rose to $32.77 per square foot from $31.88 per square foot in the second quarter of 2015. Suffolk County Class A rents fell to $27.07 per square foot this quarter from $27.60 per square foot one year ago.
  • In Suffolk County, a number of transit-focused build-to-suits are currently proposed to attract the younger workforce. The projects include a 112,000-square-foot office building proposed at 20 Station Drive as part of the Wyandanch Village revitalization project, and 300,000 square feet of commercial space that is planned for the Ronkonkoma Hub project.

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 2,300 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2015, the New York tri-state team completed approximately 32.6 million square feet of lease transactions; arranged investment sales, notes, debt and equity transactions valued at more than $8.2 billion; managed projects valued at $7.8 billion; and oversaw a property management, facilities management and agency leasing portfolio exceeding 141 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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $59.1 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.