New York City Industrial Investment Forecast
Redirected Shipping Jolts Fundamental Recovery;
Industrial Outperforms Other Asset Classes
Elevated demand for delivered goods drives leasing activity. Following declining rents in the early stages of the health crisis rising e-commerce sales have contributed to positive momentum in New York's industrial sector since. Leasing activity has been driven by shipping giants UPS and FedEx alongside multiple online retailers. Amazon recently inked a 975000-square-foot lease in Staten Island constituting nearly 12 percent of the borough's inventory. Additionally supply chain issues have diverted ships from other coastal metros to New York ports generating record levels of tonnage. As the global supply chain headwinds could extend into late 2022 and beyond short-term storage for these shipments will keep demand for warehouse space elevated. Despite high leasing appetites rapid construction may weigh on the rent recovery. Developers are poised to bring the five-year completion total to near 7.2 million square feet by the end of 2022 setting a multidecade record for inventory growth. Over 1 million square feet will come online in North Brooklyn alone where asking rents have yet to reach pre-pandemic highs.