Activity for industrial in New York City is starting to see a major pullback. Most notably, the vacancy rate in the third quarter increased to 6.4 percent, marking the highest level seen since early 2020, according to a market report from CBRE. Also, that marks the third consecutive quarter the rate rose. The Bronx saw the worst of it, with its 10.8 percent vacancy.
Overall, industrial leasing volume in NYC plunged by 51 percent from the previous three months to 727,000 square feet. Also, net absorption was in negative territory, at -340,888 square feet.
But it wasn't all bad if you put it into context. Industrial signings year-to-date are 32 percent higher compared with the first three months of 2024.
"The market saw a significant decrease in the number of renewal transactions which caused a spike in leasing velocity in the previous quarter," CBRE explained.
Some major leases in the third quarter include Nebula taking 40,000 square feet in Maspeth, Queens and Sanzheng Luggage signing for 35,520 square feet in Ridgewood, Queens. Larger deals (100,000 square feet or more) were "subdued," while mid and smaller spaces were the "highest in demand," according to CBRE.
Meanwhile, it was a strong quarter for asking rents, which increased eight percent from the previous three months and nine percent year-over-year to $31.72 per square foot.
Then there was construction, which came in a little more mixed. The category was up "modestly" quarter-over-quarter at 1.5 million square feet — but down significantly from the 3.7 million square feet posted in the previous 12 months. Most of the product underway is for Class A assets, expected to be delivered by the end of next year.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.