Long Island Office Vacancy Rate Nudges Up, Rents Also Rise
Sutton & Edwards Inc., Long Island's largest commercial real estate services firm, reported that office vacancy rates crept higher during the 2006 first quarter, but average asking rents also rose as demand for Class A space remains strong.
LAKE SUCCESS, NY (PRWEB) May 4, 2006 -- The office vacancy rate on Long Island crept higher during the first quarter of 2006 as rents also inched up, according to a new report by the commercial real estate services firm Sutton & Edwards Inc./TCN Worldwide.
The overall office vacancy rate for Nassau and Suffolk Counties was 11.07 percent for the 2006 first quarter. That compared with 10.42 percent at the end of the fourth quarter last year and 10.2 percent in the 2005 first quarter.
“There has been a flight to quality,” said Sutton & Edwards President Alan Rosenberg, noting demand for Class A space remains strong with most newly constructed office buildings in the region have been completely leased or in the process of being leased. This, he said, will mean continued upward pressure on rents. “Tenants won’t object to pricing. They are willing to pay more.”
Rosenberg said the demand for Class A space, space in professionally managed buildings with excellent locations, amenities and access, is leading landlords of high-end Class B buildings to upgrade their properties.
The average asking rent for office space on Long Island rose to $26.36 per square foot during the latest quarter. The average rent was $26.15 three months earlier and $25.43 during the first three months of 2005.
Class A office space vacancies rose to 9.27 percent Islandwide, from 8.83 percent at yearend 2006, but remained below the 10.76 percent in the 2005 first quarter. Rents for Class A space climbed to $28.82, from $28.58 three months earlier and $27.48 in the first quarter a year ago.
In Nassau County, where the bulk of the region’s office space is located, the vacancy rate for all types of offices was 10.32 percent for the first quarter, compared with 9.94 percent at yearend and 9.06 percent in the 2005 first quarter. The rate for Class A space was 10.76 percent and compared with 9.27 percent one year earlier and 9.35 percent at yearend 2005.
The vacancy rate for Suffolk County was 12.36 percent, down from 12.5 percent one year earlier and essentially flat with the 12.3 percent in the 2005 final quarter. Class A vacancies in Long Island’s eastern-most county fell sharply, to 9.35 percent from 15.31 percent in the comparable year-ago period.
The average asking rent in Nassau County was $27.39, compared with $27.23 at the end of the prior quarter and $26.90 in the comparable year ago quarter. Nassau Class A rents increased to $30.25, from $301.0 three months earlier and $28.68 a year ago.
In Suffolk County, the average asking rent rose to $23.78, from $23.46 three months earlier and $23.06 a year earlier. Class A rents in Suffolk rose to $25.95, from $25.74 at yearend and $25.08 in the first quarter a year earlier.
Founded in 1962, Sutton & Edwards Inc./TCN Worldwide is Long Island’s largest commercial real estate services firm. Operating from its headquarters in Lake Success, NY, and a branch office in Hauppauge, NY, the firm employs 50 real estate specialists providing integrated leasing, investment sales, property management and advisory solutions. To find out more about Sutton & Edwards, please call 1-516-328-6500, or visit the firm's web site at www.suttonandedwards.com.
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