According to the NYC Industrial Market Report by AEBOV, the New York City industrial sales market experienced a total of 42 transactions worth $583 million in the latter half of 2023. Despite a significant increase of 28% from the previous year, sales were still impacted by a higher interest rate environment.
Brooklyn dominated with 16 transactions and over $360 million in volume, followed by Queens with 15 trades and Bronx with 11. Owner-users, particularly those in essential service industries, had more opportunities due to reduced competition from investors. The demand for outdoor storage among owner-users also increased significantly as they accounted for majority (83%) of industrial land deals.
Institutional investors opted for older buildings with multiple tenants instead of acquiring more deals. Premiums were observed for buildings that possessed specific attributes such as high ceiling heights and close proximity to highways. However, looking ahead into the future market potential may be limited due to higher interest rates and rapid rent growth which could lead to inventory decreases caused by warehouse conversions – notably into migrant shelters.
The article originally appeared on Connect CRE.
