Industrial leasing surges in NYC as other sectors flounder
Activity was up 70% in the third quarter
Leasing office or retail space in New York City — or Manhattan apartments, for that matter — is slow going these days. But the city’s industrial real estate market is on fire.
Industrial tenants inked deals for 1.6 million square feet of space in the five boroughs during the third quarter of the year, a nearly 71 percent increase over the same time last year, according to new data from CBRE.
The availability rate for industrial and warehouse space held steady at 8 percent from the second quarter of the year. And the average asking rent remained virtually the same at just shy of $23 per square foot.
E-commerce companies dominated in new leases signed, according to CBRE, with leasing activity in that sector reflecting an uptick in demand from home-bound shoppers who are making more purchases online.
CBRE’s report doesn’t identify tenants by name, a step the firm has taken in the past with high-profile companies to avoid broadcasting their moves. But the brokerage said the largest deal of the quarter was from a “prominent e-commerce tenant” that committed to 975,000 square feet at the Matrix Global Logistics Park on Staten Island.
Amazon has already committed to at least 1.3 million square feet at the site, where Ikea has also leased 975,000 square feet.
Matrix Development Group earlier this year broke ground on another 975,000-square-foot building at the site, the last of four buildings at the 3.5 million square-foot complex.
CBRE identified two other large deals in Red Hook, Brooklyn: a 336,500-square foot lease at former Extell executive Dov Hertz’s 640 Columbia Street, and a nearly 312,000-square-foot commitment at Thor Equities’ 280 Richards Street.
Amazon has reportedly been eyeing two leases in the neighborhood totaling roughly the same square footage.
The voracious appetite for logistics and warehouse space stands in stark contrast to other sectors of the real estate market that are heading in the opposite direction due to the pandemic.
Manhattan office leasing, for example, was down 50 percent year-over-year during the third quarter, according to Colliers International. The year’s total is on track to be the lowest since the turn of the century.