Outer Borough Industrial Investments Undeterred by Slowing Economy – Trade Observer

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A slowing economy is not about to slow industrial sales in outlying boroughs (without Staten Island), according to a recent report.

Industrial real estate brokerage AEBOV found that Brooklyn, Queens and the Bronx saw a 40% increase in the number of industrial deals between the first half of 2021 and the first half of 2022, for a total of about 52.

These deals accounted for $1.4 billion and 2.7 million square feet sold, an increase of 132% and 137%, respectively, over the same period last year. The average selling price per square foot actually fell 7% to $423 between the first half of 2021 and the first half of 2022, according to the report.

Assets within a kilometer of major highways have sold 27% more than their distant counterparts, according to AEBOV President, possibly in response to inflation and rising oil prices gasoline for tenants. Daniel Tropp.

“This has caused investors to focus on quality assets, seek properties closer to major highways, offer off-street parking and have tenants on credit,” Tropp said in a statement. “Looking forward, rising rates will continue to be watched, but the supply/demand imbalance for industrial properties in New York won’t be fundamentally affected any time soon, and we believe that will keep markets in the rental and sustained investment sales.”

While Brooklyn may have seen more individual deals with 23 sales and 1.1 million square feet, Queens — the largest borough by landmass — took the lead in square footage with just 16 deals. covering 1,286,711 square feet.

However, Brooklyn sellers got more for their money, with $785 million spent on industrial space in the borough, compared to $461 million in completed deals in Queens.

Asking prices were also higher in Brooklyn: $478 per square foot, compared to $382 per square foot in Queens.

The Bronx was really behind. There were just 13 transactions totaling $153 million for 312,640 square feet, with average asking prices of $363 in the first half of 2022. AEBOV’s survey did not track sales in Staten Island.

Compared to the rest of the country, investors paid more in New York’s outlying neighborhoods.

The average price per square foot has totaled $130 nationwide since the start of the year, compared to the $423 per square foot commanded by outer boroughs, according to a August report from business advantage.

The national vacancy rate also hit 4.4% despite 200 million square feet of new industrial space coming online in the first seven months of 2022.

Marc Hallum can be contacted at [email protected].

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