The city’s outer-borough industrial market has enjoyed its strongest first quarter of the year since 2019, according to data from Cushman & Wakefield.
Firms leased 1 million square feet of space in the outer boroughs to kick off 2024, up a whopping 171.6% quarter over quarter, according to the brokerage. The overall vacancy rate stayed stable at 4.5% and dropped in Queens and the Bronx.
Dimitri Mastrogiannis, senior research analyst at Cushman, said the market “had a red-hot start to the year” and “continued to be a bright spot in New York’s commercial landscape as demand continues to outweigh supply.”
The average asking rent did fall slightly to $28.14 per square foot, down by $0.32 quarter over quarter. But despite this dip, the stable vacancy rate and growing development pipeline “serve as a great indicator of continued growth and demand” going forward, Mastrogiannis said.
Developers added 414,000 square feet of industrial space to the market during the first quarter, and an additional 1.5 million square feet are under construction, the report says. These include a 680,000-square-foot development at 23-30 Borden Ave. in Long Island City from Innovo Property Group, a roughly 386,000-square-foot project at 683 Court St. in Red Hook from LBA Logistics and a roughly 250,000-square-foot project on the Whitestone Expressway in College Point from Wildflower.
Queens saw the bulk of leasing activity during the first quarter at 55.4%, followed by Brooklyn at 33.9%, the Bronx at 9.6% and Staten Island at 1.1%, according to the Cushman report. Queens was also home to some of the quarter’s particularly large leases, including Manhattan Beach Studios taking 240,000 square feet in Glendale and Fly E-Bike taking about 52,000 square feet in Maspeth.
New York’s industrial sector held up fairly well during the pandemic, especially in comparison to its retail and office sectors, but the e-commerce and logistics firms helping to drive that growth slowed down during the second half of last year, Mastrogiannis said. The sector’s strong start to 2024 “proves that demand from food and beverage, studio and wholesale companies can rival, if not exceed, peak demand” from such firms, “a great sign for the longevity of the industrial market,” he said.
The city’s retail sector also saw a return to pre-Covid numbers last quarter, with its average availability rate dropping to 15.4%, even lower than the 21% it was at during 2019, according to data from JLL. But the office sector is continuing to struggle, with a record-high availability rate of 18.1% last quarter, according to data from Colliers.
Eddie Small , 2024-04-05 19:24:42
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