The mid-year stats on how CRE performed on Long Island are out. In this market report we’ll be looking at Long Island’s CRE market success in the second 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.
Overview of the Long Island Retail Market Performance
First a look at Long Island’s Retail Market. We’re continuing to see minimal change in the vacancy rate with a considerably low rate at 4.1%. There has been close to no change in this market over the past four quarters, which nods to the market’s stability. As for rental rates, they are up over the first quarter with rates at $26.43 per square foot at the half-year mark. We’re continuing to see a consistent rise in rental rates in both Nassau and Suffolk Counties with an increase of 3.52% from this time last year. Regarding cap rates, the retail market cap rates has lowered in the first half of 2018, averaging 5.50% compared to Q2 of 2017 when they averaged 6.00%
A Close Look at the Long Island Office Market
Next, we review the CRE status of the Long Island Office Market. The vacancy rate in the Nassau and Suffolk County office market increased from 6.8% at the close of the first quarter to 6.9% at the mid-year mark. On a whole, the vacancy rate has been relatively steady over the past year with small increases and decreases. Regarding rental rates, they experienced a decrease from Q1 when rates stood at $25.13 bringing them to $25.00 per square foot at the end of the second quarter. As for cap rates, they have been higher this year with rates averaging 7.21% compared to this time last year when they averaged 6.65%.
Long Island Industrial Market Review and Trends
Last up is 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%; a very slight increase from the end of Q1 where the vacancy rate was at 2.7%. As for rental rates, they keep climbing. The mid-year mark closed with another increase in rates holding the market at $11.80 per square foot. This represents a 3.1% increase in quoted rental rates – a significant jump. Lastly, industrial market cap rates have been higher in 2018, averaging 9.43%, compared to the first quarter of 2017 when they averaged 8.54%.