Long Island Leasing Cools Off

LONG ISLAND, NY-Increasing rental rates have slowed the office leasing market here. Leasing cooled off in both Nassau and Suffolk counties, according to a number of area market reports. However, Long Island still has the lowest availability rate among the major suburban office markets in the New York Tri-State region.

“Despite some weakening, there is price rise in the suburbs,” says Joseph Harbert of Cushman & Wakefield. C&W stats say that as rental rates continue to climb, the office market velocity slows. The firm points out that “future construction and capital improvements on existing buildings continue to fuel the increasing rental rates, while simultaneously flattening vacancy rates.”

According to CB Richard Ellis’ First Quarter 2006 Long Island Office Market Report, the area posted just 330,000 sf in total leasing activity. In Nassau County, total leasing for the first quarter totaled 214,000 sf, down from the 353,000 sf leased during the previous quarter. Consequently, the market experienced negative absorption of 40,000 sf. Following a strong fourth quarter, which netted 279,000 sf of positive absorption, Suffolk County returned to negative territory. The office market posted negative absorption of 108,000 sf on just 116,000 sf in total leasing activity.