New York Industrial Market Report

Large-format performance remains sluggish. After four straight years in which deliveries outpaced net absorption, New York City’s supply-demand imbalance is expected to begin easing this year. As supply pressure slows, the metrowide vacancy rate may retreat from the historically elevated level of near 9 percent recorded in the first quarter of 2026. Still, many newly delivered spaces, particularly larger, multi-story logistics properties in Queens and the Bronx, continue to face leasing challenges as demand for upper-floor space remains limited. Properties completed in the 2020s still carry vacancy rates above 35 percent, and limited pre-leasing among projects delivering this year will add to the existing space overhang. By contrast, small-bay spaces under 50,000 square feet, particularly single-story product with functional loading, recorded a slight increase in leasing, suggesting demand for existing infill product should remain resilient. In addition, absorption in the Bronx has strengthened over the past two quarters, which could help ease vacancy from elevated levels above 13 percent.