It's still too early to make predictions in the face of the Covid 19 pandemic, but there are good reasons to believe that the NYC's industrial sector is well positioned to weather the Corona crisis.
Industrial and warehousing businesses have essential services status and are allowed to conduct their daily operations. These services include warehousing, distribution, logistics and fulfillment, the manufacture of food, medical & other essential goods, telecommunications and data centers, auto repair, select construction sites and construction supply, skilled trades including electricians and plumbers, business storage, mail and shipping services, trash recycling and building repair, maintenance, security and disinfection services.
A recent market report by Prologis indicates that the logistics sector is positioned to handle inventory supply and demand disruptions due to standard long term occupancy contracts which serve to buffer cash flows from short term disruptions. While property values in the Investment sales market peaked in 2014/2015, the Industrial sector continued in a steady climb in values through the start of this year. The average price per square foot has increased by 10% per year since 2011.
The wave of conversion from Industrial to residential, office, retail, hotel and self storage uses reduced the supply of industrial space and allowed for the rise in rents from the city's creative and manufacturing economy revival. Rents for grade A Industrial space within the boroughs reached $30 per square foot and vacancy rates as low as 3% by 2016.
The time was right for developers to build large scale industrial buildings for the 1st time in many years. The new demand for industrial space has primarily been driven by the growing e commerce and logistics industry where the demand for last mile delivery in New York has gone through the roof!
Another growth factor for the industrial sector is the demand for movie and T.V. Studios expansion plans within the 5 boroughs. These studios include Silvercup Studios, Steiner Studios, Kaufman Astoria Studios, Broadway Stages as well as Lionsgate and Netflix.
An annual tax credit of $420M from New York State certainly did help in this expansion.
If you are interested in selling your property or you know someone who is planning to sell their New York or Brooklyn property, whether a single family residential property, an apartment building, a commercial property, mixed use, multi family, coop or condo, vacant land or a development opportunity, call us. You will be very happy that you did.
We always bring our clients the top market price for their property and provide exceptional personalized service from initial consultation to closing.
Accord Real Estate Group
Your Brooklyn Real Estate Brokers and Agents