1. LONG ISLAND
3Q11
in Garden City. PricewaterhouseCoopers also renewed at 401
Overview Broadhollow Road in Melville for 19,676 sf this quarter.
The Long Island economy, like the rest of the nation, experienced ups
and downs over the past several months. While unemployment The third quarter saw three significant office investment sales, two of
declined nationwide from a year ago, as well as in New York State which occurred in Central Nassau County. David Werner and
from 8.3% to 7.7% and on Long Island from 7.2% to 6.8%, the privately owned Carlton Associates acquired a two building, 188,500-
number of reported people in the labor force declined significantly sf portfolio at 1000 Stewart Avenue and 500 Endo Boulevard for
since last year. After a long period of job gains, Long Island lost $39.2 million. Another investment sale occurred around the corner at
1.1% of its private sector and government jobs since last August. In 1600 Stewart Avenue in Garden City, where the Carlton Group
data from a recent survey polling CFOs on Long Island as published bought the 220,000-sf building for $23.5 million. The largest
by Long Island Business News, the general consensus is that it will investment sale of the quarter and year was Government Properties
take at least 18 months for the local economy to rebound to pre- Income Trust’s purchase of the 265,000-sf building at 5000 Corporate
recession levels. Court in Holtsville for $39.3 million.
Leasing & Sales Activity Vacancy & Rents
The third quarter closed with leasing transactions totaling 355,290 The overall vacancy rate for Long Island decreased from last quarter
square feet (sf), bringing year-to-date leasing activity to 1,114,261 sf, to 18.2%, representing a 4.7% decrease since third quarter 2010.
representing a 15.3% decrease from last year. Over the past five Suffolk County’s vacancy rate remains notably higher than Nassau
years, the average year-to-date leasing number at the close of the County’s, showing a 21.0% vacancy rate compared with Nassau
third quarter has been approximately 1.13 million square feet (sf), County’s 16.5% vacancy rate.
placing 2011’s leasing activity just around the average.
The third quarter closed with an average overall asking rent of $29.31
The two largest leases of the quarter both occurred in Eastern Nassau per square foot (psf), up from $29.19 psf last quarter and up by 1.5%
County. Astoria Federal Savings Bank’s 55,000-sf lease at One since last year. Class A space closed the quarter at $31.85 psf, a 1.8%
Jericho Plaza in Jericho was the largest lease of the third quarter, increase since last year.
followed by Clever Devices’ 43,592-sf lease at 300 Crossways Park
Drive in Woodbury. The largest lease in Suffolk County was CNA
Insurance’s 23,000-sf lease at 395 N Service Road in Melville.
Outlook
While the economy continues to recover at a slower-than-expected
The largest renewal of the third quarter and 2011 was Merril Lynch, pace, the Long Island office market is expected to see gradual signs of
Pierce, Fenner & Smith’s 50,154-sf renewal at 1225 Franklin Avenue improvement over the next year. The fourth quarter, generally the
busiest quarter of the year, still holds promise with leases already in
place and a significant number of tenants out in the market.
4
Stats on the Go Direct vs. Sublease Overall Rental vs.
Availabilities Vacancy Rates
3Q10 3Q11 Y-o-Y 12 month
Change Forecast Di rec Su bl ease Re nt Vaca ncy
6.0 $35 .0 0 2 0.0%
Overall 19.1% 18.2% -0.9 pp 1 8.0%
Vacancy $28 .0 0
1 6.0%
4.0
Direct Asking $29.62 $29.63 0.03% $21 .0 0 1 4.0%
msf
psf/yr
Rents
$14 .0 0 1 2.0%
2.0 1 0.0%
YTD Leasing 1,315,102 1,114,261 -15.3%
Activity (sf) $7 .0 0
8 .0 %
0.0 $0 .0 0 6 .0 %
20 07 2 008 2009 20 10 3Q11 20 08 2009 20 10 2 011 YTD