New York City Industrial Market Report
Tenant Demand Improves Amid Port Congestion;
Reduced Construction Pipeline Aids Existing Spaces
Leasing for storage and distribution space returns. A sizable population continues to drive demand for New York industrial space, especially properties that support e-commerce activity. Rents multiple times the national average can present challenges for smaller tenants when incomes are disrupted, however, a headwind that intensified during the health crisis. Between April and September of last year a net 1.1 million square feet of industrial space was returned to the leasing market. Net absorption has since stabilized and turned positive, with many wholesalers and retailers moving into spaces this year. A modest supply pipeline is helping drive demand to existing floor plans, contributing to a mild contraction in vacancy and supporting rent growth.