(To read more on the industrial market, click here.)

MELVILLE, NY-Rechler Equity Partners has signed more than 300,000 sf of deals in the industrial/flex market here. The deals bring total occupancy to 97.4%.

“We anticipate a continuation of this trend for the remainder of the year and a further tightening of the market, especially for top quality industrial and flex space,” says Mitchell Rechler. The largest transaction was a 128,517-sf new lease by Elm Freight at 2002 Orville Drive in Bohemia. Marchon inked a 25,000-sf renewal at 265 Spagnoli Rd. here.Other large-scale transactions included Schoolwide Inc.’s 21,600-sf renewal at 65 Orville Dr.; Joint Apprentice’s 21,554-sf extension at 85 Engineers Rd. in Hauppauge; Interpharm’s 20,000-sf new lease at 85 Adams Ave. in Hauppauge; and a 15,000-sf new commitment by Rogan Loomstate at 180 Orville Dr. Rechler says the deals “ran the gamut from large, multi-faceted” to renewals and expansions by existing tenants “looking to take advantage of Long Island’s strong business environment.”

Rental rates are finally showing some life, according to Grubb & Ellis. The average asking rental rate for warehouse/distribution space has bumped up 5.6% over the past year, ending the first quarter at $4.56 per sf per year NNN. The firm suggests that the market is approaching its equilibrium vacancy rate, perhaps somewhere between 7.5 and 8%. A number of factors are in place to encourage even more construction: increasing rental rates, plenty of capital for development and investment, rising global trade, outsourcing of manufacturing activity, and ongoing streamlining of corporate supply chains. The firm expects rental rates will continue to rise at a slow to moderate pace in many markets.

Due to the increase of goods being traded with China, US industrial warehousing space and logistical operations are growing by leaps and bounds, with 68.9 million sf of development expansion occurring in 2005, according to a joint study just released by the Staubach Co. and DTZ Debenham Tie Leung. And according to PricewaterhouseCoopers first quarter 2006 Korpacz Real Estate Investor Survey, rental rates have “popped” shifting control to owners. On the warehouse front, the firm says falling vacancy rates, together with a perceived opportunity for rising rental rates, are drawing interest in new development activity throughout the national warehouse market. Long Island was among the lowest vacancy rates at 4.8%.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.