With over 20 million residents and an unmatched mix of global institutions, universities, and cultural landmarks, the New York metro continues to attract both talent and investment. The financial sector, anchored by firms like JPMorgan Chase and Goldman Sachs, continues to be a global powerhouse, while the tech industry has surged with expansions from Google, Amazon, and a new wave of AI startups. Enhanced infrastructure projects are also ongoing to aid the city, including Penn Station’s expansion and the Gateway rail project.

 

New York Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.6%
• Current Population: 14,854,869
• Households: 5,721,523
• Median Household Income: $89,938

 

Population, Labor, and Income Growth

Source: CoStar Group, Inc.

 

Key Findings

• Availability in New York’s industrial market rose to 10.3%, surpassing both the historical average of 8.5% and the national rate of 9.7%.
• New York is nearing the end of its recent development cycle, with construction starts at their lowest pace in over a decade.
• The metro noted population losses during the pandemic, but recently bounced back with the addition of 87,000 residents in 2024.

 

Market Performance

New York’s industrial sector is recording increased availability as demand moderates. The industrial availability rate reached 10.3%, well above its long-term average of 8.5% and higher than the national average of 9.7%. Roughly 35 million square feet of new supply has been added since early 2023, but leasing activity fell about 5% year-over-year as tenants right-sized and tariffs dampened demand.

 

The vacancy rate was at 7.8% in Q3 2025, with net absorption totaling –1.9 million square feet. Rent growth, once at 11% annually, has slowed to 0.0%, particularly among large logistics spaces facing higher vacancies. Despite these headwinds, strong port and airport connectivity, together with dense consumer demand, continue to underpin long-term market fundamentals.

 

New York Industrial Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

New York Construction

Industrial construction across New York is winding down from a major development cycle. Construction starts have fallen below their long-term average for three consecutive quarters, setting up 2025 to record the lowest starts in over a decade. Roughly 8 million square feet remains in the pipeline, well below the 19.7 million peak seen recently, with just 0.9% of total inventory under construction. Most projects are concentrated in outer submarkets like Orange County and Western Route 287, where land is more available and affordable. However, leasing has also slowed for high-quality facilities, such as the 1.3 million-square-foot Bronx Logistics Center, highlighting a tenant-favored market.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Sales

New York’s industrial investment market has stabilized following two record-setting years. Sales volume reached $718 million in Q3 2025. Institutional investors have become more active since late 2024, favoring fully leased, income-producing assets amid softer fundamentals. Major trades include Terreno Realty’s $156 million purchase of Amazon-leased 280 Richards St. and Prologis’ $197 million acquisition of two occupied logistics properties. Despite higher borrowing costs and widening buyer-seller gaps, optimism is returning as interest rate stability and moderating supply signal improving transaction momentum ahead.

 

Sales Volume

Source: CoStar Group, Inc.

 

For insights on Brooklyn’s  industrial sector from Matthews™ Vice President Bobby Lawrence, click here.