Long Island, NY Retail Market Report
Market Overview
Higher-than-average household earnings and a robust job market have consistently upheld Long Island’s retail sector. The most significant segments of the retail market are located in Central Suffolk and Western Suffolk, where inventories total 28 million square feet and 26 million square feet, respectively. However, Nassau County’s Garden City, Westbury, and Valley Stream have the heaviest retail stock concentrations. Throughout Q2 2023, retail space demand tracked slightly ahead of new supply, which helped to keep the vacancy rate stable.
Highlights
- Huntington Commons is the largest project in the pipeline, which will feature nearly 218,000 square feet when completed in August.
- As of Q3 2023, annual net absorption stands at one million square feet, surpassing the 640,000 square feet recorded in the same period last year. This increase was boosted by Walmart’s recent occupancy of The Shoppes at the Boulevard in Yaphank.
- Long Island shopping malls have the highest vacancy rate but also demand the highest average rents, approximately $42 per square foot.
- The top sale in 2023 has been the Riverhead Centre, a 136,000-square foot property valued at $176 per square foot.
Rents | Vacancy | Construction
Currently, the vacancy rate in the Long Island market stands at 4.0%, while the average rent is $33.00 per square foot.
With occupancy rates improving in recent quarters, there has been a 0.5% increase in rents over the past year. While vacancy rates are expected to remain steady, CoStar Group predicts that the annual rent growth will begin to slow down in the latter part of 2023 and eventually become negative by mid-2024. The prevalence of affluent communities in Nassau County often results in higher requested rents. In Central Nassau, the metro’s third-costliest submarket, the average asking rent is roughly $8 per square foot higher compared to those in Southwestern Suffolk. In the last 10 years, Long Island has completed 12 projects exceeding 100,000 square feet in size, with a notable concentration of these significant developments occurring in Nassau County. Approximately 570,000 square feet are currently being built, which accounts for 0.4% of the current available space.
Sales
In the last 12 months, retail investors have been very active within the Long Island retail market, with approximately $1.2 billion in transactions.
Investors are focusing on acquiring valuable properties in well-frequented areas, especially those featuring appealing grocery components, to leverage the strong consumer spending capacity on Long Island.
Long Island by the Numbers Last 12 Months
- Sales Volume: $1.2B
- Vacancy Rate: 4.0%
- Deliveries in SF: 576K
- Net Absorption in SF: 1.3M
- Rent Growth: 0.5%
