New York Industrial Market Report
2023 Investment Forecast
Logistics Landscape Sees Rapid Expansion in Outer Boroughs;
Manhattan Environment Relatively Static
Historic supply injection contributes to record availability. Builders are expected to complete a multidecade high of square footage across the five boroughs this year, pushing vacancy near the level last seen at the onset of the health crisis. More than one-third of the space coming online in 2023 stems from a single project in the Bronx, contributing to a two-year supply expansion rate of 10 percent in this borough. Marketed rents here have declined since the beginning of 2021, and the locale may face another challenging period this year. Similar headwinds could be observed in neighborhoods of Brooklyn and Queens, which are also receiving ample amounts of square footage. The manufacturing sector, however, retains a more positive outlook. Although New York’s life sciences sector is not as large as other Northeastern markets, the city government has announced several initiatives to spur growth in this segment, including a $20 million investment in 50,000 square feet of flex space in the Brooklyn Navy Yard. In the near term, however, a dearth of specialized space should keep leasing in this segment heavily competitive.