E-Commerce Firm Inks 569K SF Lease for Bronx Industrial Multistory

The largest new warehouse in NYC—a mammoth 1M SF multistory logistics center that opened earlier this year on Bruckner Boulevard in the Bronx—has inked the largest industrial tenant transaction of the year in the city: a 568K SF deal that will fill about half of the industrial facility.

A JLL leasing team led by Vice Chairman Rob Kossar and Executive Managing Director Leslie Lanne announced the deal involving an undisclosed occupier at the multistory marvel that was developed at the intersection of five major highways by Innovo Property Group in partnership with Square Mile Capital.

According to JLL’s Q3 Industrial Market report for NYC’s outer boroughs, “an undisclosed e-commerce use” agreed to the lease at the new IPG logistics hub.

Demand for high-quality warehouse space in the outer boroughs is so strong—the vacancy rate is 1.9%—tthat JLL reports an 86% pre-leasing rate for the 3.5M SF of new deliveries expected in Q4.

Such an imbalance between supply and demand continues to put landlords in the driver’s seat in lease negotiations, resulting in asking rents on the warehouse component of new developments beyond $40.00 PSF and parking components surpassing $20.00 PSF This has helped drive overall asking rent 18.8% higher YOY.

Comprising 1.07 million square feet of Class A logistics space spread across two floors and 500,000 square feet of fleet storage, the new logistics center at 2505 Bruckner is situated at the intersection of the Cross Bronx Expressway, Hutchinson River Parkway and the Bruckner Expressway.

The site of the mega-warehouse was acquired by Innova from Extell Development in 2015 for $75M. Extell purchased the site, formerly the Whitestone Cinemas complex, for $41M in 2013 after the multiplex was shuttered.

In 2020, Innovo and Square Mile secured a $305M construction loan for the Bruckner logistics hub from Bank OZK and EverWest Real Estate Investors.

“We are thrilled to have completed a 568,543-square-foot lease at 2505 Bruckner,” said Kossar. “The remaining 499,011 square feet of modern logistics space presents another large-scale option for tenants seeking last-touch, speed-to-market logistics in a supply constrained market.”

According to JLL’s 3Q extreme tightness in the market continues to drive developer and institutional activity to new heights. Lanne commented, “Tenants seeking to service the region’s massive consumer base continue to search for last-mile logistics space that takes the guessing out of delivery.”

Leasing velocity during Q3 exceeded 1.1M SF in NYC’s outer borough, driving YTD volume to 2.3M SF, nearly 45 percent higher than all of 2021 combined.

As the largest new logistics warehouses came on line this year, they quickly drew tenants. Do & Co. New York Catering inked a deal for 189K SF at Triangle Equities’ Terminal Logistics Center.

Small occupiers continued to expand across warehouses in the outer boroughs, JLL’s report said, noting that more than 53% of all Q3 transactions were for leases for less than 20K SF.