- Long Island industrial leasing activity jumped 53.6% year-over-year in Q1, totaling 1.1M SF.
- Food & beverage, e-commerce, and logistics tenants drove nearly 70% of new signings.
- Vacancy dipped to 5.2% as average asking rents broke $19 PSF for the first time.
Sustained Demand Drives Leasing Momentum
Industrial leasing on Long Island is accelerating, with Cushman & Wakefield reporting 1.1M SF in new deals during Q1 2026. This marks the third consecutive quarter crossing the 1M-SF threshold—evidence that the region’s warehouse and logistics appetite shows few signs of cooling. According to Cushman & Wakefield’s MarketBeat report cited by Globe St, leasing volumes are now at their second-highest level in three years. A year-over-year surge of nearly 54% follows steady tailwinds from growth industries including food & beverage, e-commerce, and related logistics.
Much of this activity has concentrated in two submarkets: Central Suffolk and Western Suffolk, which together accounted for nearly 65% of all deals. This continued strength in leasing highlights Long Island’s resilience as both a distribution and last-mile market within the greater New York region.
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The Details
Gate Gourmet led industrial leasing with a 63,437-SF deal in Western Nassau. Frank Lowe followed with 61,916 SF. L&K Distributors leased 59,299 SF.
Food and beverage, e-commerce, and logistics tenants leased 69.3% of first-quarter space. Average asking rents reached a record $19.15 PSF. Vacancy fell 20 basis points to 5.2%. Nassau County’s vacancy dropped below 5% for the first time since 2024. Tight supply continued to support the market.
Pricing Power Amid Modest Absorption
Long Island added industrial space, but demand still outpaced available inventory. That imbalance pushed rents higher. The market posted 68,869 SF of negative absorption during the quarter. Cushman & Wakefield linked the decline to more large contiguous spaces entering the market.
Even so, vacancy stayed well below national averages. Landlords continued to raise rents to record levels. While industrial vacancies increased across several US markets, Long Island moved in the opposite direction. Nassau County posted the sharpest vacancy decline.
Why It Matters
Long Island’s industrial market continues to outperform weaker national trends. Food and beverage and e-commerce tenants continue to drive leasing activity. First-quarter leasing increased 54% year over year. Companies continue to favor regional distribution hubs and last-mile facilities as delivery demand grows. That contrasts with parts of the industry where distributors are consolidating warehouse networks after major acquisition activity.
Record asking rents of $19.15 PSF highlight landlords’ pricing power. Nassau County’s vacancy remained among the Northeast’s lowest. Limited speculative construction should keep competition for space elevated.
However, risks remain. Long Island lost 1,270 industrial jobs last quarter. Manufacturing, trade, and transportation all contracted. Negative absorption also suggests more large spaces became available. Even so, strong tenant demand continues to support rent growth.
What’s Next
Demand from e-commerce and grocery users should support leasing through 2026. However, developers will closely track absorption and employment trends. If negative absorption continues, some landlords could slow future rent increases to maintain occupancy.
Still, vacancy remains at 5.2%, while asking rents sit at record highs. Those fundamentals continue to favor property owners. Limited speculative construction should preserve pricing power across most Long Island submarkets. Job growth will remain the key indicator to watch. Continued employment losses could slow the market’s momentum.
