New York City is still industrial-strength
E-commerce-driven warehousing boom continues to buoy the sector
By: Bill Egbert
(Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
New York City’s industrial market remained hot in 2022, with a particularly strong final quarter.
The vacancy rate did tick up by 0.5 percentage points last year, but remained low, ending 2022 at just 4.2 percent, according to data from Cushman & Wakefield. Net absorption rose by more than 9 percent year-over-year in the city and asking rent lept by more than 24 percent, reaching $25.63 per square foot in the fourth quarter.
Developers are banking on the sector’s continued growth. Three of the city’s four largest industrial projects in the pipeline are being built on spec, including the mammoth 1.3 million-square-foot facility by Turnbridge Equities in the South Bronx.
The project, dubbed the Bronx Logistics Center, is in Hunts Point, which is already home to some of the largest industrial facilities in the city, distributing produce, meat and fish to New York City grocers and restaurants.
Because land is far more expensive in the boroughs than in the boonies, some developers are building the city’s first multi-level warehouses. They pale in comparison to Asia’s, though, which can be several times taller.
Although the industrial sector is still breaking records throughout the Northeast, analysts warn the market may have peaked.