Third quarter leasing activity in Long Island’s office market was down about 10 percent, according to a report from Cushman & Wakefield.
The overall asking rental rate was $31.29 per square foot, down 3.4 percent since the third quarter of 2007. Sublease space- about 580,000 square feet – accounts for 15.4 square feet of all available space in Nassau and Suffolk counties. As a result, the third quarter overall vacancy rate was 12 percent, an increase of 7.1 percent.
Direct absorption totaled negative 74,323 square feet and is expected to remain negative into the beginning of 2009, according to the report.
Building sales remain sluggish with only one significant deal closing during the third quarter. A 106,600 square-foot office building at 330 Old Country Road was sold to Teachers Insurance and Annuity for $23.4 million. C&W expects the sales market to continue at a slower pace due to the constraints of the debt markets and expensive financing.
The report concludes that the Long Island office market will continue to soften as the economic slowdown continues, but not all areas will suffer. Rental rates will decline at a much slower pace than in other suburban markets, due to an overall lack of new construction here.
