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News release

MELVILLE

Long Island Industrial Rents Surpass $11 Per Square Foot

Average asking rents have trended higher for past four consecutive years


MELVILLE, N.Y., November 14, 2016 — Sustained demand for limited Long Island industrial vacancies continued to fuel an increase in average asking rental rates, pushing industrial rents to record levels, according to JLL research. After four consecutive years of rising rates, rents for industrial space on Long Island eclipsed $11.00 per square foot in the third quarter of 2016, an increase of 5.0 percent from the $10.50 per square foot recorded at mid-year.

The largest industrial lease transactions in the third quarter of the year were:

  • John Hassall LLC; 62,001 square feet at 609-1 Cantiague Rock Road in Westbury
  • PODS Enterprises LLC; 47,000 square feet at 120 Spagnoli Road in Melville
  • Dicom USA; 45,000 square feet at 600 West John Street in Hicksville

"Demand for Long Island industrial product has not yet plateaued despite a limited supply and no new development projects in the pipeline," said Tom DiMicelli, JLL Executive Vice President. "The market's overall vacancy rate continued its steady march downward this quarter. Tenants are locking in early leases for quality space, and, as a result, Long Island's overall vacancy rate stood at a staggering 1.8 percent in the third quarter of the year."

Local government agencies have provided numerous companies with tax abatements, drawing several businesses to expand into Central Suffolk. Companies expanding their footprint within the market by means of support from the Industrial Development Agency include Hauppauge-based Royal Apparel, which will relocate to a larger facility at 91 Cabot Court. In addition, Beyer Graphics Inc. is purchasing a third facility at 40 Austin Boulevard in Commack, and Evaric Pharmaceutical purchased a 110,000-square-foot facility at 155 Commerce Drive in Hauppauge.

The average sales price of Long Island industrial properties continued to escalate in the third-quarter of 2016, rising to $95.00 per square foot, again surpassing the highest prices the market has recorded in more than eight years. That represented a 21.8 percent increase from the average sale price of $78.00 per square feet recorded in early 2016.

Notable sales transactions in the quarter include Savoy Medical Supply Co.'s purchase of 40 Rabro Drive in Hauppauge from Muller Martini USA for $4.95 million, or $105.11 per square foot; Printex Transparent Packaging Inc.'s purchase of 555 Raymond Drive in Islandia from Heller Realty LLC for $3 million, or $100.00 per square foot; and Premier Care Industries' purchase of an 80,000-square-foot building at 150 Marcus Boulevard in Hauppauge from Voxx International Corp. for $7.7 million, or $96.26 per square foot.

Other highlights from JLL's third quarter 2016 Long Island industrial market report include:

  • The overall industrial vacancy rate for Long Island rose 20 basis points this quarter to 1.8 percent from 1.6 percent at midyear 2016.
  • The average asking rental rate for Long Island industrial space rose 5.0 percent this quarter to $11.03 per square foot from $10.50 per square foot at midyear 2016.

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.  JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and a global workforce of more than 60,000.  On behalf of its clients, the company 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. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 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.