Eastern Nassau Industrial Submarket Report: Mid-2024 Overview

The Eastern Nassau industrial submarket has experienced notable shifts in demand and supply dynamics during the first half of 2024. Here’s a comprehensive look at the latest trends and developments:

Key Statistics

  • 12-Month Deliveries: 145,000 SF
  • 12-Month Net Absorption: 33,800 SF
  • Vacancy Rate: 4.5%
  • Market Asking Rent Growth: 4.8%

Leasing Activity

The year began with a decline in space demand, but the second quarter saw a significant recovery. Net absorption reached 96,000 SF in Q2, compensating for the first quarter’s -64,000 SF. Limited new supply since 2022 has kept demand as the primary market driver. However, vacancies have increased slightly due to supply additions surpassing demand. In the past 12 months, 150,000 SF were added to the inventory, while tenant demand was 34,000 SF.

Rent Trends

To maintain occupancy rates below 5%, property owners have moderated rent increases post-pandemic. Annual rent growth stands at 4.8%, down from 7.5% the previous year.

Construction Highlights

Early 2024 saw the completion of the Rockefeller Group’s Crossways Logistics Center in Woodbury, a 145,000-SF warehouse. The Nassau Logistics Center in Hicksville, a 207,000-SF project, is expected to be completed in September. Hicksville leads in move-ins for the year, with Fargo HVAC Supply Inc. occupying 33,000 SF at a warehouse on Duffy Ave under a five-year lease starting at $18/SF.

Geographic Advantages

The industrial submarket primarily serves the local population and benefits from its proximity to significant transit hubs and intersections, including the Jericho Turnpike-Long Island Expressway intersection, Newbridge Road, and the Northern State Parkway.

Market Indicators

  • Logistics: $20.58/SF with a 4.8% vacancy rate
  • Specialized Industrial: $18.62/SF with a 3.6% vacancy rate
  • Flex: $21.34/SF with a 4.8% vacancy rate
  • Overall Submarket: $20.17/SF with a 4.5% vacancy rate

Historical Trends

  • Vacancy Change (YOY): 4.8% (current) vs. 5.3% (historical average)
  • Net Absorption SF: 33,800 (current) vs. 63,502 (historical average)
  • Deliveries SF: 145,000 (current) vs. 75,835 (historical average)
  • Market Asking Rent Growth: 4.8% (current) vs. 3.9% (historical average)
  • Sales Volume: $53M

Active Properties

Significant leasing activity includes:

  • 165 Eileen Way: 107,000 SF with a 15% vacancy rate
  • 15 Grumman Rd W: 3,722,173 SF with a 1.5% vacancy rate

Conclusion

The Eastern Nassau industrial submarket has shown resilience and adaptability in the first half of 2024. Despite early challenges, the market is poised for continued growth with substantial developments in the pipeline and sustained demand driven by strategic geographic advantages. Rent growth has moderated, maintaining competitiveness while ensuring healthy occupancy rates.

This summary provides a snapshot of the current state and future outlook of the Eastern Nassau industrial submarket, essential for stakeholders and potential investors in the region.