Long Island Q1 Retail Market Report

Market Overview

Higher-than-average household earnings and a robust job market have consistently upheld Long Island’s retail sector. As of Q1 2024, the demand for retail space in Long Island continues to outpace new supply. Given the low unemployment rate, positive demographic trends suggest ongoing robustness in consumer spending for the remaining part of the year.

Highlights

• Retail vacancy rates in Long Island remain stable at around 4.2% as demand continues to outpace new supply.
• Despite stable occupancies, there’s a forecasted moderation in annual rent growth, particularly in shopping malls.
• Areas like Garden City, Westbury, and Valley Stream tend to have higher asking rents compared to other Suffolk submarkets.

Long Island’s retail market shows promise for continued growth, with affluent areas commanding higher rents.

Rents | Vacancy | Construction

As of Q1 2024, retail rents in the Long Island metro area average $35.00 per square foot, experiencing a moderate growth of 1.5% over the past year. Despite stable occupancies of around 96%, moderation in annual rent growth is forecasted in the near term, particularly in shopping malls, which command the highest average rents of about $46.00 per square foot.

Strong demand and minimal construction activity have led to a decrease in available retail space, which currently stands at 5.0%. There is a limited amount of new development in progress, with only 820,000 square feet currently under construction, accounting for just 0.5% of the existing inventory.

Sales

Retail investment activity has witnessed over $2.5 billion in transactions between 2021 and 2022, primarily focusing on high-traffic locations with appealing grocery elements to capitalize on the region’s strong consumer spending. Wealthy individuals and developers are expected to continue driving investment in the near future, while REITs and institutional buyers, who were active in 2022, took a more cautious approach in 2023 to assess the impact of monetary policy on consumer spending. The sales volume for Q1 on Long island was $144,082,992 and the average price per square foot was $348.

Long Island By the Numbers | Past 12 Months | Source: CoStar Group

• Sales Volume: $656M
• Vacancy Rate: 4.2%
• Deliveries in SF: 171K
• Net Absorption in SF: 144K
• Rent Growth: 1.5%