IRR-New York Mid-Year Viewpoint 2015 Local Market Report - Industrial
The New York City industrial market has been transforming over the last thirty years. It was previously dominated by multi-story mill buildings located on the west side of Manhattan and areas of Brooklyn, Queens and the Bronx which served the shipping, railroad and later trucking industries. Many of these buildings have been demolished or converted to other uses as manufacturing employment slowly moved to cheaper locales. Shipping and later air freight became more dominate in the moving of goods in and out of the country's "Gaterway."
Today, New York is the nation's seventh busiest air cargo hub, moving 1.3 million tons of air cargo annually. As industrial uses have transformed to sophisticated logistics services, demand has shifted to proximity to the seaports and airports. Modern industrial buildings with clear height of 33 feet or more are highly sought after by tenants and investors. The growth of on-line shopping has accelerated demand. High land values and construction costs have restricted the amount of new construction, however, tenants have been willing to pay record high rents to secure modern facilities.
Industrial rent levels for modern space can exceed $20 per square foot, about four times higher than levels in suburban locations. Sales of improved properties commonly exceed $200 per square foot and can reach $300 per square foot, however, sales are few as there is currently a limited supply of such properties and owners are not willing sellers for such a sought after investment class.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.