According to CBRE's newly released Q3 market report, New York City's industrial real estate market posted 864,000 sq. ft. of leasing activity during the third quarter of 2021, a 47% increase from the previous quarter.
As a result of this robust leasing, the average asking rent for all asset classes increased by 2% from Q2 2021 to end the third quarter at $23.00 per sq. ft., while industrial space in Class A properties was $29.82 per sq. ft.
"NYC's industrial sector exhibited strength, despite the lack of major leases," said Nicole LaRusso, CBRE Director of Research & Analysis. "Given the availability rate of just 2.2% for large, this issue is a lack of supply, not one of demand, which is very strong especially among third-party logistics companies and e-commerce firms. Despite the limited availability, the market seen year-to-date leasing total over the 2.3 million sq. ft. With 13 properties currently under construction totaling more than 4.9 million sq. ft., NYC's industrial market should see leasing pick up as these new properties come on line."
According to CBRE's report, 52 leases were signed in the third quarter of 2021. While e-commerce leasing activity was lackluster in Q3, the largest transaction was by a construction supply company that inked a 73,000 sq.-ft. lease for warehouse space.
While net absorption in Q3 was negative 102,011 sq. ft., the year-to-date absorption was a positive 328,441 sq. ft. The availability rate for all asset classes increased by 10 basis points (bps) to 8.1% from Q2 2021 and increased 10 bps from Q3 2020.
On the investment sales front, the NYC industrial market recorded 20 investment or owner/user sales of 760,000 sq. ft., for a total consideration of over $243 million. Four sales totaling over 240,000 sq. ft. were completed in the Bronx, six sales totaling over 122,000 sq. ft. were in Brooklyn, while Queens recorded nine sales totaling over 383,000 sq. ft. and Staten Island had one sale totaling 10,000 sq. ft.