Q4 2022 Industrial Space Report: New York, NY
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
New York City is home to many notable company headquarters, including those of IBM, PepsiCo, and Healthfield Operating Group, among others.
Unemployment in the city reached 5.8% in Q4 2022. The metro area population for the city reached 18,867,000.
In Q4 2022, the New York’s industrial real estate market saw stable performance behind high leasing velocity, increased absorption, and increased construction activity.
General Area Overview & Demographics
The New York metropolitan area is one of the most populous urban areas in the world. Hispanic or Latinos make up 29.6% of the total population. The largest demographic is Caucasian at 33.5%. African American residents make up 24%, while Asian Americans represent 13.8% of the population.
New York City Median Household Income & Population
Median household income in New York City was $75,157 as of 2021. The city also has a larger portion of households earning over $200,000 a year than the national average, with about 12.94% of households earning this much. The city is one of the most expensive to live and work in as of Q4 2022.
The median age of residents in the city in 2022 was 35. About 40% of the population was between the ages of 25 and 44.
Columbia University and New York University are two of the most well-known schools in the area, but there are also numerous other universities and colleges including CUNY (City University of New York), Rockefeller University, Fordham University, and St. John’s University.
A variety of major tourist attractions can be found in New York including the Empire State Building, the Statue of Liberty, Central Park, and Times Square. Other popular destinations include the Metropolitan Museum of Art, the Guggenheim Museum, and the Broadway theater district.
New York City is subject to a humid subtropical climate and typically experiences warm summers and mild winters. Summers are usually hot and humid while winters are cold with occasional snowstorms. Temperatures can drop to below freezing in the winter months.
Summary of New York Industrial Real Estate Performance in Q4 2022
Total vacancies for New York City industrial real estate reached 2.1% in Q4 2022.
The Long Island City submarket had the highest industrial vacancy for the quarter at 3.9%.
Industrial absorption reached a record high at 2,430,965 square feet. This was 53.9% higher than the previous record of 1.6 million square feet in 2020.
What are industrial rents like in New York City?
Direct asking rents for New York City industrial real estate reached $36.13 per square foot while sublease asking rents reached $28.50 per square foot. These are among some of the most expensive in the nation.
The average total asking rate was highest in the Brooklyn Waterfront submarket at $39.80 per square foot, followed by South Bronx at $39.70 per square foot.
Purchase & Leasing Activity
Industrial sales in New York City for the year totaled $2.1 billion, 58.9% higher than 2018’s peak sales.
Leasing activity for the quarter saw over 1.5 million square feet signed across 84 deals. This was a 106% increase quarter-over-quarter.
Notable Industrial Real Estate Deals in New York in Q4 2022
There were several notable deals that took place for New York City’s industrial real estate in Q4 2022:
- DB Schenker leased 83,127 square feet in the Springfield Gardens submarket.
- Standard Motor Products, Inc. leased 75,000 square feet in the Long Island City submarket.
- ZeroSpace leased 48,000 square feet in the Gowanus submarket.
These are select examples among other activity.
New Industrial Real Estate Development Activity in New York in Q4 2022
Industrial completions for the quarter reached 452,020 square feet, bringing the yearly completion total to nearly 3.1 million square feet of product.
There were nearly 3.6 million square feet of industrial real estate in the pipeline at the close of 2022.
Market Forecast for New York’s Industrial Real Estate Market
New York’s industrial real estate market remained healthy in 2022 and is forecasted to remain stable into 2023.
Direct asking rates will likely see increases in the coming year due to rising tenant interest in new Class A properties.
Takeaways for Industrial Real Estate Investors
Increasing asking rates, increased leasing velocity, and a large quantity of product in the pipeline could prove to be positive indicators for New York City investors heading into 2023.
Look for Class A property leasing and sales to become competitive in 2023.
Do your research, stay diligent, and happy investing.
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