Office Market Shrinks by 19%
By Hank Russell
The Long Island industrial market had its worst leasing activity in two years with the total volume during the second quarter of 2025 reaching 40,930 square feet, according to CBRE. It was a drop of 16% from the previous quarter.
In terms of construction activity, there was a slowdown in added supply, CBRE said. This slowdown in new construction provided the market with an opportunity to absorb existing supply. Over 3.1 million square feet of new supply was added since Q1 2023, of which 65% remained unleased. Additionally, five buildings totaling 780,455 square feet remained under construction, all slated for delivery by year-end.
“The combination of steady leasing activity and the absorption of existing supply will help stabilize the market and create a favorable environment for future growth,” CBRE said.
On the positive side, from March to June 2025, Western and Central Suffolk accounted for 82% of all leasing activity, CBRE said. Some of the more notable leases include:
- Trader Joe’s announced it will build to suit a 921,000-square-foot warehouse and distribution center at the former Computer Associates campus in Islandia.
- MediSys Health Network signed a new lease for 93,971 square feet at 1 Adams Boulevard in Farmingdale.
- Communication Power Corporation leased 44,778 square feet at 90 Davids Drive in Hauppauge.
In the office market, leasing activity in the Long Island office market was 368,000 square feet during the second quarter of this year, which is 19% off from the first quarter and 7% below the five-year quarterly average of 396,000 square feet, according to CBRE.
The only bright spot was that, so far this year, 824,000 square feet has been leased to date — 13% more than the first six months in 2024 and 8% greater than the mid-year average over the past five years, based on CBRE data.
Western Suffolk led all five submarkets with 120,000 square feet, despite a 10% drop from its five-year quarterly average. Leasing activity in Western Nassau was 60% above its five-year quarterly average, with 77,000 square feet, followed by Central Nassau (76,000 sq. ft., -27%), Eastern Nassau (38,000 sq. ft., -5%) and Central Suffolk (56,000 sq. ft., -19%).
Among the transactions:
- Nationwide Mortgage Bankers leased 28,500 square feet at 1305 Walt Whitman in Melville.
- Andersen Tax leased 21,000 square feet at 395 North Service Road in Melville.
- OEC Freight will relocate from Queens to a 24,000-square-foot facility at 5 Dakota Drive in Lake Success.
- Allstate renewed its lease at its 32,403-square-foot facility at RXR Plaza in Uniondale
- North Shore Community Services renewed its lease at its 21,721-square-foot facility at 5 Dakota Drive in Lake Success.
- Elecnor Hawkeye signed a new lease for a 21,562-square-foot facility at 1415 Kellum Place in Garden City.