NAI Long Island Newsletter

Retail Market Recap 4th Quarter 2023

Market Overview: The demand for retail space in Long Island is comfortably ahead of new supply, maintaining stable vacancies around 4%. The net absorption over the past 12 months is 800,000 SF, indicating growth amid a healthy economic backdrop. The retail market benefits from above-average household incomes and a strong labor market. The largest retail submarkets are in Central and Western Suffolk, with Nassau County having the heaviest concentrations of retail stock.

Leasing: There has been healthy demand for retail space, with significant net absorption in properties like Green Acres Mall and The Shoppes at the Boulevard. The availability rate has declined to 5.0%, with the eastern half of Nassau County having the least space on the market.

Rent: As of the fourth quarter of 2023, the average retail rent in Long Island is $34.00/SF, which is 36% above the national average. Annual rent growth has slowed to 1.0%. Shopping malls have the highest vacancy rate but also command the highest rents.

Construction: Approximately 860,000 SF of retail space is under construction, representing 0.5% of the existing inventory. Major projects include Belmont Arena Retail and Huntington Commons. Suffolk County is seeing more new projects compared to Nassau County.

Sales: Retail investors have been active, with about $876 million trading hands over the past 12 months. However, sales activity in 2023 is on pace to decline 63% from the previous year’s $1.5 billion. The top trade recorded in 2023 was the purchase of Riverhead Centre.

This summary provides a snapshot of the Long Island retail market’s performance, including aspects like leasing, rent, construction, and sales.