According to the NYC Industrial Market Report by AEBOV, the second half of 2023 saw a total of 42 transactions in the New York City industrial sales market, amounting to $583 million. Despite a significant increase of 28% from the previous year, sales were still impacted by higher interest rates.
Brooklyn took the lead with 16 transactions and over $360 million in volume, followed by Queens with 15 trades and Bronx with 11. Owner-users had more opportunities due to reduced investor competition, particularly in essential service industries. The demand for outdoor storage among owner-users also increased significantly as they accounted for majority (83%) of industrial land deals.
Institutional investors showed less interest and focused on older buildings with multiple tenants instead. Premiums were observed for buildings that had specific attributes such as high ceilings and proximity to highways. However, future prospects may be limited due to higher interest rates and rapid rent growth which could potentially decrease inventory availability through warehouse conversions – notably into migrant shelters.
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