In this market report we’ll be taking a look to see how Long Island’s CRE markets performed in the first quarter. Arming you with details and statistics, this report will include Long Island’s retail, office, and industrial markets. To most easily digest this information we will break it down simply by market with a focus on three key factors: vacancy rates, rental rates, and cap rates.
Retail Market Performance
First, a check-in on the status of Long Island’s Retail Market. With minimal change from Q4 2017 to the end of Q1 2018, the Nassau and Suffolk retail markets remain healthy although evolving. The vacancy rate remained unchanged at 4.3%. As for rental rates, they are up over the previous quarter with rates at $26.71 per square foot. We continue to see a consistent rise in rental rates for over a year and a half now – this is a good sign for the status of economy on Long Island. Regarding cap rates, the retail market cap rates had been higher in 2017, averaging 6.58% compared to the same period in 2016 when they averaged 6.16%.
Office Market Report
Next, we have Long Island’s Office Market. The vacancy rate in the Nassau and Suffolk County office market increased from 7.3% at the end of 2017 to 7.6% at the end of this year’s first quarter. Regarding rental rates, they are down over the previous quarter by 1.8% leaving rates per square foot at $28.13. If we were to forecast this market’s trend for the year we would assume rates will hover around this number, or slightly decrease as the office landscape continues to experience change. As for cap rates, the office market cap rates had been higher in 2017, averaging at 6.97% compared to the same period in 2016 when they averaged at 6.50%.
Industrial Market Overview
Last, a look at Long Island’s Industrial Market. The Nassau and Suffolk County industrial market has seen minimal variances over the past year with current vacancy rates at 3.0%, remaining unchanged from Q4 of 2017. As for rental rates, they have been consistently on the rise. Q1 closed with another increase in rates holding the market at $11.45 per square foot. This represents a 1.1% increase in quoted rental rates from the fourth quarter when the rental rate average was reported at $11.32 per square foot. Lastly, industrial market cap rates had been lower in 2017, averaging 7.42% compared to last year when they had averaged 8.73%.