New York City Industrial Market Report

Notable inventory additions stoke vacancy as sector contests with headwinds. Last year was a rocky period for the city’s tech and financial firms, which shed some positions, and by relation impacted the demand for last-mile delivery space servicing these highly-compensated personnel. While recruitment across traditional office-using sectors is expected to pick up in 2024, logistics providers could hold off on industrial leasing commitments until the city’s employment base — and by extension consumer spending — are on firmer footing. Amid these demand headwinds, the city is expected to see record-breaking speculative supply additions, headlined by the 1.3-million-square-foot Bronx Logistics Center located less than a mile from the RFK-Triborough Bridge. A pipeline including several 100,000-square-foot-plus assets will put particular pressure on existing spaces in the Bronx, Brooklyn and Queens, though a growing residential base across these boroughs will help integrate this year’s deliveries moving forward. More than 40,000 multifamily units are underway in these areas as of early 2024, facilitating a solid foundation for long-term logistics demand.