4Q’16

Long Island Market Report

Long Island Office 4Q 2016

Office

Long Island 4Q16 Office Report The Long Island Office market ended the fourth quarter 2016 with a vacancy rate of 7.2%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (166,975) square feet in the fourth quarter. Net absorption for the overall Long Island office market was negative (166,975) square feet in the fourth quarter 2016. That compares to positive 435,654 square feet in the third quarter 2016, positive 260,341 square feet in the second quarter 2016, and negative The Long Island office market (12,401) square feet in the first quarter 2016. ended the 1st quarter 2015 with an increased vacancy During the fourth quarter 2016, eight buildings totaling 338,648 square feet were rate of 8.4%. The vacancy rate completed in the Long Island market area. This compares to six buildings totaling 75,428 was 8.2% at the end of the 4th square feet that were completed in the third quarter 2016, one building totaling 165,000 quarter 2014, 8.0% at the end square feet completed in the second quarter 2016, and 211,172 square feet in six of the 3rd quarter, and 7.7% buildings completed in the first quarter 2016. at the end of the 2nd quarter 2014. The average quoted asking rental rate for available office space, all classes, was $28.78 per square foot per year at the end of the fourth quarter 2016 in the Long Island market area. This represented a 0.8% increase in quoted rental rates from the end of the third quarter 2016, when rents were reported at $28.55 per square foot. Tallying office building sales of 15,000 square feet or larger, Long Island (New York) office sales figures fell during the third quarter 2016 in terms of dollar volume compared to the second quarter of 2016. One of the largest transactions that occurred within the last four quarters in the Long Island (New York) market is the sale of Falchi Building in Long Island City. This 711,194-square-foot office building sold for $255,000,000, or $358.55 per square foot. The property sold on 12/23/2016, at a 5.50% cap rate.

Trends for 4Q16

VACANCY RATE

NET ABSORPTION

CONSTRUCTION

ASKING RATES

SALES ACTIVITY

Total office building sales activity in 2016 was down compared to 2015. In the first nine months of 2016, the market saw 39 office sales transactions with a total volume of $456,563,981. The price per square foot averaged $165.44. In the same first nine months of 2015, the market posted 53 transactions with a total volume of $683,802,153. The price per square foot averaged $263.73.

Significant Lease Transactions: Tenant

Building

Size

Submarket

New York City Fire Department

Metrotech Center - North Bldg.

339,993 SF

Downtown Brooklyn

WeWork

Three Gotham Center

250,000 SF

Northwest Queens

Honeywell

2 Corporate Center Dr.

133,884 SF

Western Suffolk

Market Overview Report - 4Q 2016 Total Office Submarket Statistics SUBMARKET

TOTAL RBA (SF)

# BLDGS.

TOTAL AVAILABLE (SF)

TOTAL VACANT AVAILABLE (%)

TOTAL NET ABSORPTION (SF)

TOTAL AVG. UNDER RATE ($/SF/YR) CONSTRUCTION (SF)

Central Nassau

558

15,075,849

1,075,192

7.1%

89,736

$28.46

255,000

Central Queens

243

4,265,120

145,173

3.4%

(29,334)

$30.06

0

1,060

10,140,445

729,405

7.2%

14,757

$20.21

11,169

Downtown Brooklyn

197

22,917,003

1,305,701

5.7%

311,779

$53.90

435,500

Eastern Nassau

539

14,018,209

1,110,002

7.9%

143,997

$26.77

47,964

Eastern Suffolk

674

3,752,727

177,577

4.7%

72,982

$24.66

23,141

North Brooklyn

642

11,468,280

1,870,867

16.3%

(127,402)

$33.80

1,188,142

Northeast Queens

672

11,094,430

258,386

2.3%

66,834

$40.55

235,785

Northern Nassau

212

1,534,034

110,471

7.2%

(2,783)

$24.53

0

Northwest Queens

403

14,105,554

1,170,111

8.3%

(379,298)

$34.96

125,227

South Brooklyn

922

15,136,693

957,526

6.3%

(88,677)

$31.19

434,294

South Queens

371

6,030,890

353,258

5.9%

76,739

$29.56

39,401

Southeast Nassau

210

1,372,205

55,204

4.0%

(1,943)

$25.11

13,013

Southern Nassau

569

5,623,501

401,252

7.1%

2,699

$24.94

0

Southwestern Suffolk

514

3,173,234

200,597

6.3%

(46,463)

$18.02

24,635

Staten Island

888

6,616,368

275,171

4.2%

121,413

$27.40

71,400

Western Nassau

466

12,993,069

773,998

6.0%

212,561

$31.73

346,062

Western Suffolk

1,278

23,866,882

2,193,098

9.2%

79,022

$24.30

12,541

7.2%

516,619

Central Suffolk

TOTALS

10,418

183,184,493 13,162,989

$28.78

3,263,274

Construction Activity | Markets Ranked by Under Construction SF Under Construction Inventory

Average Bldg Size

MARKET

# Bldgs

Total RBA

Preleased SF

Preleased %

All Existing

U/C

Brooklyn

19

2,057,936

379,951

18.5%

28,122

108,312

Nassau

8

662,039

594,971

89.9%

19,819

82,755

Queens

11

400,413

295,787

73.9%

21,016

36,401

Suffolk

6

71,486

47,550

66.5%

11,609

11,914

Staten Island

2

71,400

24,700

34.6%

7,451

35,700

Long Island Retail 4Q 2016

Retail

Long Island 4Q16 Retail Report The Long Island retail market did not experience much change in market conditions in the fourth quarter 2016. The vacancy rate went remained at 3.3% from the previous quarter.

Trends for 4Q16

Retail net absorption was strong in Long Island fourth quarter 2016, with positive 830,982 square feet absorbed in the quarter. In third quarter 2016, net absorption was positive 542,644 square feet; while in second quarter 2016, absorption came in at positive 554,609 square feet. In first quarter 2016, positive 552,220 square feet was absorbed in the market. During the fourth quarter 2016, 18 buildings totaling 881,639 square feet were completed in the Long Island retail market. Over the past four quarters, a total of 1,346,126 square feet of retail space has been built in Long Island. In addition to the current quarter, 15 buildings with 145,537 square feet were completed in third quarter 2016, nine buildings totaling 64,682 square feet completed in second quarter 2016, and 254,268 square feet in 13 buildings completed in first quarter 2016. Average quoted asking rental rates in the Long Island retail market are up over previous quarter levels, and up from their levels four quarters ago. Quoted rents ended the fourth quarter 2016 at $33.24 per square foot per year. That compares to $32.56 per square foot in both the first and third quarters 2016. This represents a 2.1% increase in rental rates over both the current quarter and four quarters ago. Tallying retail building sales of 15,000 square feet or larger, Long Island (New York) retail sales figures fell during the third quarter 2016 in terms of dollar volume compared to the second quarter of 2016. One of the largest transactions that occurred within the last four quarters in the Long Island (New York) market is the sale of RKO Keith-Albee Theatre in Flushing. This 77,348 square foot retail center sold for $65,775,000, or $850.38 per square foot. The property sold on 7/29/2016.

VACANCY RATE

NET ABSORPTION

CONSTRUCTION

ASKING RATES

SALES ACTIVITY

Total retail center sales activity in 2016 was down compared to 2015. In the first nine months of 2016, the market saw 55 retail sales transactions with a total volume of $575,689,042. The price per square foot averaged $284.16.

Significant Lease Transactions: Tenant

Building

Size

Submarket

Audi

30-35 College Point Blvd.

81,532 SF

Northeast Queens

Stew Leonard’s Marketplace

1897 Front St

70,000 SF

Central Nassau

Dick’s Sporting Goods: Field & Stream

834 Walt Whitman Rd.

50,174 SF

Western Suffolk

Market Overview Report - 4Q 2016 Total Retail Submarket Statistics # BLDGS.

TOTAL GLA (SF)

TOTAL AVAILABLE (SF)

TOTAL VACANT AVAILABLE (%)

TOTAL NET ABSORPTION (SF)

Central Nassau

1,151

15,355,498

616,088

4.0%

(34,026)

$28.01

994

Central Queens

1,880

14,223,563

404,091

2.8%

162,340

$41.58

72,400

Central Suffolk

2,311

26,000,994

1,032,373

4.0%

37,509

$22.34

177,350

Downtown Brooklyn

516

6,539,637

366,205

5.6%

558,761

$90.87

0

Eastern Nassau

966

13,564,101

381,403

2.8%

85,037

$28.80

254,443

Eastern Suffolk

1,850

13,486,196

534,650

4.0%

(75,626)

$29.89

15,296

North Brooklyn

7,745

43,215,757

1,173,542

2.7%

372,430

$51.95

281,520

Northeast Queens

2,861

21,887,232

465,123

2.1%

263,173

$63.45

199,428

479

3,130,590

89,159

2.8%

29,806

$36.47

21,000

Northwest Queens

1,535

12,139,945

247,892

2.0%

48,039

$42.60

6,544

South Brooklyn

7,003

38,854,385

939,930

2.4%

603,597

$41.83

142,146

South Queens

2,647

17,423,764

760,512

4.4%

180,327

$30.64

463,964

707

7,348,910

258,580

3.5%

(21,875)

$22.11

8,600

Southern Nassau

1,848

16,061,882

727,489

4.5%

132,855

$24.21

3,000

Southwestern Suffolk

1,187

11,600,882

402,094

3.5%

49,752

$24.90

2,520

Staten Island

2,370

17,404,653

661,762

3.8%

(86,053)

$32.83

844,350

Western Nassau

960

8,839,222

290,081

3.3%

22,599

$42.72

13,757

Western Suffolk

2,537

24,691,598

837,990

3.4%

151,810

$27.23

48,954

SUBMARKET

Northern Nassau

Southeast Nassau

TOTALS

40,553

311,768,809 10,188,964

3.3%

2,480,455

TOTAL AVG. UNDER RATE ($/SF/YR) CONSTRUCTION (SF)

$33.24

2,556,266

Construction Activity | Markets Ranked by Under Construction SF MARKET

Under Construction Inventory

Average Bldg Size

# Bldgs

Total GLA

Preleased SF

Preleased %

5

844,350

838,775

99.3%

7,344

168,870

Queens

24

742,336

570,863

76.9%

7,360

30,931

Brooklyn

18

423,666

232,204

54.8%

5,805

23,537

Nassau

11

301,794

44,954

14.9%

10,522

27,436

Suffolk

14

244,120

196,496

80.5%

9,611

17,437

Staten Island

All Existing

U/C

Long Island Industrial 4Q 2016

Industrial

Long Island 4Q16 Industrial Report The Long Island Industrial market ended the fourth quarter 2016 with a vacancy rate of 3.4%. The vacancy rate was unchanged over the previous quarter, with net absorption totaling negative (226,561) square feet in the fourth quarter. Vacant sublease space increased in the quarter, ending the quarter at 503,789 square feet. Rental rates ended the fourth quarter at $15.22, an increase over the previous quarter. A total of five buildings delivered to the market in the quarter totaling 16,826 square feet, with 584,938 square feet still under construction at the end of the quarter. Net absorption for the overall Long Island Industrial market was negative (226,561) square feet in the fourth quarter 2016. That compares to positive 164,612 square feet in the third quarter 2016, positive 103,722 square feet in the second quarter 2016, and negative (278,193) square feet in the first quarter 2016.

Trends for 4Q16

VACANCY RATE

NET ABSORPTION

During the fourth quarter 2016, five buildings totaling 16,826 square feet were completed in the Long Island market area. This compares to three buildings totaling 53,350 square feet that were completed in the third quarter 2016, five buildings totaling 192,586 square feet completed in the second quarter 2016, and nothing completed in the first quarter 2016. The average quoted asking rental rate for available Industrial space was $15.22 per square foot per year at the end of the fourth quarter 2016 in the Long Island market area. This represented a 3.0% increase in quoted rental rates from the end of the third quarter 2016, when rents were reported at $14.77 per square foot. Tallying industrial building sales of 15,000 square feet or larger, Long Island (New York) industrial sales figures rose during the third quarter 2016 in terms of dollar volume compared to the second quarter of 2016. In the third quarter, 40 industrial transactions closed with a total volume of $610,776,030. The 40 buildings totaled 2,631,873 square feet and the average price per square foot equated to $232.07. That compares to 37 transactions totaling $225,622,175 in the second quarter. The total square footage was 1,814,448 for an average price per square foot of $124.35.

CONSTRUCTION

ASKING RATES

SALES ACTIVITY

Significant Lease Transactions: Tenant

Building

Size

Submarket

Best Market

1724 Fifth Ave

292,000 SF

Hauppauge Ind.

N/A

85 Nicon Ct

104,000 SF

Hauppauge Ind.

N/A

960 Alabama Ave

76,800 SF

South Brooklyn Ind.

Market Overview Report - 4Q 2016 Total Industrial Submarket Statistics SUBMARKET

TOTAL RBA (SF)

# BLDGS.

TOTAL AVAILABLE (SF)

TOTAL VACANT AVAILABLE (%)

TOTAL NET ABSORPTION (SF)

TOTAL AVG. UNDER RATE ($/SF/YR) CONSTRUCTION (SF)

Central Nassau Ind.

459

9,429,416

388,159

4.1%

34,924

$13.24

0

Central Queens Ind.

698

20,573,889

440,527

2.1%

(169,970)

$17.44

48,742

Deer Park Ind.

722

17,260,745

399,667

2.3%

(22,367)

$8.58

0

East Farmingdale Ind.

614

19,378,575

398,791

2.1%

(37,827)

$11.26

0

Eastern Nassau Ind.

715

24,196,648

1,070,267

4.4%

(116,368)

$12.10

0

Eastern Suffolk Ind.

444

5,500,544

250,524

4.6%

139,854

$10.37

0

Hauppauge Ind.

649

26,352,870

540,717

2.1%

202,871

$8.51

292,000

3,162

60,251,419

1,967,276

3.3%

(410,217)

$25.40

0

North Central Suffolk Ind.

201

3,276,855

70,123

2.1%

(1,935)

$12.11

0

Northeast Queens Ind.

584

11,860,177

205,525

1.7%

14,019

$19.30

55,062

Northern Nassau Ind.

104

2,359,876

477,996

20.3%

2,415

$11.94

0

1,464

34,908,681

1,441,330

4.1%

(451,203)

$19.90

42,131

Northwest Suffolk Ind.

222

3,387,191

95,801

2.8%

339,675

$10.48

0

Ronkonkoma/Bohemia Ind.

731

18,163,545

408,959

2.3%

(31,111)

$9.66

24,000

1,505

34,378,744

2,284,091

6.6%

36,848

$19.64

48,000

South Central Suffolk Ind.

386

9,960,517

362,212

3.6%

(30,479)

$10.95

36,261

South Queens Ind.

628

13,301,695

426,042

3.2%

49,534

$14.49

0

Southeast Nassau Ind.

77

930,787

38,000

4.1%

(34,400)

$11.85

0

Southern Nassau Ind.

777

11,793,217

355,660

3.0%

177,856

$12.14

0

Southwest Suffolk Ind.

627

10,684,818

144,507

1.4%

34,058

$9.04

0

Staten Island Ind.

334

6,161,257

205,384

3.3%

22,300

$13.46

12,742

Western Nassau Ind,

325

8,054,332

75,482

0.9%

15,103

$13.61

26,000

15,428

352,165,798

12,047,040

3.4%

(236,420)

$15.22

584,938

North Brooklyn Ind.

Northwest Queens Ind.

South Brooklyn Ind.

TOTALS

Construction Activity | Markets Ranked by Under Construction RBA MARKET

Under Construction Inventory

All Existing

U/C

32,000

11.0%

27,193

146,000

145,935

127,935

87.7%

23,902

12,161

4

60,261

36,148

60.0%

23,825

15,065

Brooklyn Ind.

1

48,000

0

0.0%

20,276

48,000

Nassau Ind.

1

26,000

0

0.0%

23,103

26,000

Staten Island Ind.

1

12,742

12,742

100.0%

18,447

12,742

Eastern Suffolk Ind.

0

0

0

0.0%

12,389

0

Total RBA

Western Suffolk Ind.

2

292,000

Queens Ind.

12

Central Suffolk Ind.

Preleased SF

Average Bldg Size

Preleased %

# Bldgs

NAI Long Island

Who We Are NAI Long Island provides its clients with a menu of real estate services and specialized support. Our goal is to be able to customize a delivery platform based on a client’s requirements. Unlike a “one size fits all” business philosophy, NAI Long Island and its account executives understand that clients require different services, and in order for a client to knowledgeably order from our menu, we are pleased to provide a basic description of what NAI Long Island offers. Founded in 1980, NAI Long Island is acknowledged in the industry as a brokerage firm which demonstrates excellence and quality. Our professional staff have in-depth market knowledge, experience and the proven ability to negotiate successful client specific transactions. Our expertise is complemented and enhanced by a professional staff, state of the art systems, and a computerized database to provide current market and property information. NAI Long Island operates in the New York Metropolitan area, and is the Long Island and Queens local firm and exclusive member of NAI Global, the world’s most extensive commercial real estate services organization. The philosophy of NAI Long Island is to consistently provide unsurpassed quality of service to our clients in all facets of brokerage and property management, and to maintain a positive, creative work environment in order to attract the most talented real estate professionals. By focusing on these fundamentals, we believe our business will continue to prosper and grow. NAI Long Island has assembled an outstanding group of professionals who are specialists in the management, sales, and leasing of properties. We believe our understanding of the market, and our local and regional marketing capabilities are unsurpassed. Strategies implemented by NAI Long Island include a combination of marketing fundamentals and innovative targeting and promotion, based on a clear understanding of the competitive positioning of the property. An important component in our approach to marketing is close coordination with the owner and property manager to ensure that each aspect of property operations enhances its marketability.

Like us on Facebook Follow us on Twitter @nailongisland.com

NAI Long Island 175 Broadhollow Road | Suite 150 | Melville NY 11747 | USA +1 631 270 3000 | www.nailongisland.com