Long Island commercial real estate activity in a lull

Commercial real estate on Long Island

Demand for office space in Nassau and Suffolk counties fell sharply during the pandemic.

Long Island’s housing market is booming. However, the commercial office space sector is not doing well. Rental activity on the island has plummeted. The pandemic is to blame.

“The commercial market has too much inventory and no demand,” said Jay Orsini, a Douglas Elliman real estate agent.

A recent report from Avison Young found that leasing volumes fell 42% below the 20-year average.

“We had a client looking for approximately 8,000 square feet and there were over 30 buildings to choose from between Nassau and Suffolk [counties]”said Avison Young managing director Ted Stratigos.” And that’s a lot.

Although 42% seem to be conquering how much, Stratigos believes it is only temporary. Remote working is one reason why there are so many empty office buildings. However, he said companies are not currently entering into long-term leases.

“2020 and even 2021 is not the time to make long-term decisions,” said Stratigos.

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Douglas Elliman has 60 office space listings on Long Island and there is little activity, Orsini said. Tenants have an advantage because landlords are willing to negotiate prices and terms.

“When we rented a commercial lease, the term was seven to ten years,” said Orsini. “Now the landlords are downgrading these deadlines to three to five years and adding a COVID protection clause.”

Stratigos said companies are slowly bringing their workers back. He believes it could take two years for the commercial market to turn again.