According to data from JLL, last year was the busiest leasing year for the city’s industrial properties since 2020, when the onset of the pandemic initially made it seem as though they might be the only viable real estate investments left.
Firms leased more than 2.8 million square feet of industrial space in the outer boroughs during 2024, behind only the sector’s 2020 peak of 5.6 million square feet, the report says. Activity from companies taking between 50,000 and just under 100,000 square feet of space largely drove the year’s strong numbers, as firms signed 18 leases in that size range compared with just four in 2023, according to JLL.
Notable deals last year included The MBS Group taking 240,000 square feet at 66-31 and 66-35 Otto Road in Queens and Brooklyn Storehouse taking 104,000 square feet at the Brooklyn Navy Yard.
In the fourth quarter specifically, firms leased about 400,000 square feet of space, a 36.8% drop from the two-year average, according to data from CBRE. Film production studios, food manufacturing facilities and logistics providers were the main drivers, and the average asking rent increased quarter over quarter and year over year to reach $30.39 per square foot.
Major leases for the quarter included Cinelease taking 90,000 square feet at 1213 Grand St. in East Williamsburg and DHL Express taking 60,000 square feet at 1970 Pitkin Ave. in East New York.
The vacancy rate for 2024 increased year over year, to 4.3%, after developers finished building 2.7 million square feet of new space, but this remains very tight for the Northeast, the JLL report says. And with just five projects under construction and only two expected to be finished by 2026, there is not much relief on the horizon.
This longstanding supply issue should make industrial real estate a good investment going forward even as the record-setting numbers from prior years will likely remain out of reach, according to JLL.
