Why is this important?
Changes in retail space provide an insight to regional economic activity over time. Key indicators include vacancy rates, rental rates and net absorption rates which measures whether the current inventory level is shrinking or growing. Real estate analysts use the “net absorption rate,” that is, the measure of total square feet occupied minus the total space vacated over a given period of time, to assess whether the amount of space becoming available in the market exceeds the space being taken off the market (described as negative absorption) which is usually a leading indicator for increased vacancy rates and lower asking rents.
How are we doing?
The overall vacancy rate for Nassau and Suffolk County combined decreased in the fourth quarter 2013, ending at 5.1%. Over the past four quarters, the market has seen an overall decrease in the vacancy rate and the Long Island rate is lower than that of the nation as a whole where it is 6.6%.
In the same five-year post-recession period, rents have risen and fallen twice and in the last quarter are again on the rise and ending 2013 at $23.61, a 4% increase from the beginning of 2009.
The number of buildings has decreased 1% from 12,694 at the beginning of 2009 to a 12,559 at the end of 2013. Total net absorption on Long Island has been positive since the 3Q 2010. Compared to our regional neighbors, Long Island has a lower vacancy rate than our suburban neighbors but not surprisingly all the suburban regions are much higher than New York City. Conversely, our rental rates are the highest of the three suburban areas but dramatically lower than NYC. All the regions boast a positive net absorption rate but it is problematic that development of new construction on Long Island is the lowest across the metropolitan region.
Long Island Downtowns
At the local level, some Long Island downtowns have fared exceedingly well since the recession of 2008 and have dramatically decreased their vacancy rates.
For more information about retail statistics by downtown, go to www.longislandindexmaps.org and select the RETAIL tab. Choose a downtown and view the data for that community in the left-hand panel.