Lake Success, NY (PRWEB) April 18, 2007
Demand for prime office space on Long Island was strong during the first quarter of 2007 despite an increase in the overall office vacancy rate, according to a new report by Long Island's leading commercial real estate services firm Sutton & Edwards Inc. / TCN Worldwide.
The vacancy rate for Class-A space - space in the newest, amenity filled buildings in the best locations -- for Nassau and Suffolk Counties dropped to 8.12 percent from 8.81 percent at yearend. The average asking rent for Class-A space edged up to $29.75 per square foot, from $29.69 three months earlier. One year ago, the vacancy rate for prime space was 9.27 percent, when the average asking rent $28.82.
"The market is strong and should remain robust with an increasing tilt toward a landlords market producing continued rent increases," said Sutton & Edwards Chief Executive Herb Agin. He said demand in the region could be heightened as rents in New York City continue to soar, causing companies located there to retain space they already have on Long Island or seek out additional space to house workers now in Manhattan.
In addition, Agin noted, "Big blocks of space are virtually non-existent." He said the relative lack of new construction in the region has contributed to tightness in the Class-A market.
Nevertheless, Agin said, sounded a note of caution. "The market's strength could dissipate if there's something over the horizon that nobody now sees." He noted that mortgage bankers and brokers, who aggressively leased space in the region in recent years, could experience fallout from the collapse of the sub-prime lending market.
Islandwide, the office vacancy rate overall was 11.51 percent. That compared with 11.00 percent during the final quarter of 2006 and 11.07 percent for the 2006 first quarter. The average asking rent for office space on the Island for the first quarter was $27.29 per square foot. Three months earlier, the average rent was $27.26. One year ago, the average asking rent was $26.36.
In Nassau County, where the bulk of the region's office space is located, the vacancy rate for all types of offices was 10.68 percent and the average asking rent was $28.58 per square foot. Three months earlier the vacancy rate was 10.11 percent and the average rent $28.66. In the first quarter of 2006, the vacancy rate was 10.32 percent and the average asking rent was $27.39.
The vacancy rate for Class A buildings in Nassau was 7.33 percent, down from 8.54 percent at year end and 10.76 percent one year earlier. The Class A asking rent for the Island's western-most county was $31.34 per square foot, compared to $31.46 at year end and $30.25 a year earlier.
In Suffolk County, the vacancy rate for the 2007 first quarter was 13.09 percent, up from 12.7 percent at year end and 12.36 percent a year ago. During the latest quarter, the average asking rent in the region's eastern-most county was $24.09, up from $23.73 a year end and $23.78 one year earlier.
The Class A vacancy rate in Suffolk was 9.63 percent at the end of the latest quarter, compared with 9.32 percent at yearend and 9.35 percent one year earlier. Class A rents in Suffolk averaged $26.55 during the first three months of 2007, up from $26.14 at yearend and $25.95 in the comparable year-ago period.
First quarter office leasing was brisk and included a number of significant transactions, including a renewal for 77,000 square feet by Vytra Health Plans at 395 N. Service Rd., Melville; Broadridge Financial Solutions Inc.'s lease for 70,000 square feet at 1981 Marcus Ave, Lake Success and the Mortgage Zone's lease for 60,000 square feet at 360 Motor Pkwy., Hauppauge; and 36,000 square feet at Huntington Quadrangle, leased by the law firm Shearman & Sterling.
About Sutton & Edwards Inc. / TCN Worldwide
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 Ronkonkoma, NY, the firm employs more than 60 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.