Long Island, NY, 2nd Quarter Office Vacancies Fall, Rents Up

Lake Success, NY (PRWEB) July 24, 2006 -—

Office vacancies on Long Island fell during the 2006 second quarter as rents continued to climb, Long Island’s leading commercial real estate services firm, Sutton & Edwards Inc./TCN Worldwide., reported.

For the two county Nassau-Suffolk region, the office vacancy rate at the end of the quarter was 10.70 percent, down from 11.07 three months earlier and 11.03 percent one year ago. Overall asking rents were $26.45 per square foot on average, up from $26.36 in the first quarter and $25.80 in the 2005 second quarter.

The 2006 second-quarter islandwide vacancy rate for Class A buildings, space in professionally managed buildings with prime locations and amenities, was 8.83 percent and the average asking rent was $28.99 per square foot. The vacancy rate for the first quarter was 9.27 percent and the average rent was $28.82. In the 2005 second quarter the vacancy rate was 12.5 percent and rents average $27.42.

“The strength of the market combined with deals that recently were completed or currently being negotiated will mean a tremendous drop in the inventory during the third quarter,” said Alan Rosenberg, President of Sutton & Edwards. He predicted that rising office rents in Manhattan, now in the $80-$100 per square foot range, will drive smaller deals to Long Island. “It’s getting crazy there,” he said of Manhattan.

In Nassau, Long Island’s most-populous county, the overall vacancy rate declined to 9.79 percent, from 10.32 percent three months earlier, but was higher than the figure one year ago, 9.68 percent. The average asking rent in Nassau was $27.63 for the latest quarter, up from $27.39 in the first quarter and $26.90 in the 2005 second quarter.

Class A space in Nassau continued to experience sharp demand, despite the addition of 100,000 square feet in Jericho, as the vacancy rate for top buildings fell to 8.23 percent, from 9.23 percent three months earlier and 9.69 percent a year ago.

In Suffolk, the second quarter vacancy rate dipped to 12.44 percent, from 12.5 percent three months earlier and was sharply lower from the 13.61 percent recorded in the 2005 second quarter. Asking rents in Suffolk, however, slipped over the most recent three months to $23.49 per square foot from $23.78 in the 2006 first quarter. Rents averaged $23.06 a year ago.

Suffolk experienced a slight quarter-to-quarter rise in Class A vacancies over the second three months of 2006, but the vacancy rate remained well below year-ago levels. The latest occupancy figure was 9.99 percent, up from 9.35 percent in the 2006 first quarter. However, the rate contrasts sharply with the 17.64 percent in the 2005 second quarter. Asking rents for prime Suffolk office space dipped slightly over the latest three months to $25.67 per square foot, from $25.95 in the first quarter. A year ago, the average asking rent for top space was $25.12. The figures for Suffolk do not include two buildings under construction, 118,000 square feet at 324 S. Service Rd., Melville, which will be completed this year, and 200,000 square feet at 102 Motor Pkwy., Hauppauge, which won’t be finished until 2007.

“It’s still pretty flat, especially in Suffolk,” Rosenberg noted. “It goes in spurts.”

About Sutton & Edwards

Founded in 1962, Sutton & Edwards Inc. / TCN Worldwide is Long Island’s premier commercial real estate services firm. Headquartered in Lake Success, NY, the firm employs 64 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 http://www.suttonandedwards.com.

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