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LAKE SUCCESS, NY-The first quarter figures are in, and class A office space on Long Island appears to be benefiting from the high rental rates in New York City. Demand for space remained strong in the first few months of the year, even as overall office vacancy rose.

According to a report by Sutton & Edwards Inc./TCN Worldwide, the overall office vacancy rate on Long Island hit 11.51%, up from 11% in the fourth quarter of 2006 and 11.07% in the first quarter of 2006. However, some counties did report good news in the first quarter, with Nassau and Suffolk registering an 8.12% vacancy rate, down from 8.81% at the end of 2006.

An increase in rents came along with the vacancy decrease, with the average asking rents for class A space reaching $29.75 per sf, up slightly from $29.69 per sf at year’s end. “The market is strong and should remain robust with an increasing tilt toward a landlords market producing continued rent increases,” Sutton & Edwards chief executive Herb Agin says in a statement. He adds that Long Island’s popularity should continue to grow as rents in New York City continue to rise, “causing companies located there to retain space they already have in Long Island or seek out additional space to house workers now in Manhattan.”

Specifically, class A office space in Nassau County saw a vacancy rate of 7.33%, down from 8.54% at the end of 2006 and 10.76% a year ago. Asking rent in the county’s class A office buildings was $31.34 per sf, compared to $31.46 per sf at the end of 2006 and $30.25 per sf a year ago, according to the report. The bulk of the region’s office space is in Nassau County, Long Island most western county.

In Suffolk County, the region’s most eastern county, class A office space saw a vacancy rate of 9.63% in the first quarter, up from 9.32% at year’s end and 9.35% a year ago. Class A rents averaged $26.55 per sf in the first quarter, an increase from $26.14 per sf at year’s end and $25.95 per sf a year ago.

Agin also notes that the lack of new construction has contributed to the tightness in the class A sector. “Big blocks of space are virtually non-existent.”

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