New York’s industrial performance is shifting toward a new landscape as supply continues to outpace demand. Availability has climbed to 10.9%, well above both the long-term average and the national rate, reflecting roughly 35 million square feet of new deliveries since 2023 and a sharp rise in sublet space as occupiers right-size. Vacancy was at 7.7% in Q4 2025, with positive absorption of about 2 million square feet, but muted demand is expected to push vacancy higher over 2026.
This imbalance has cooled rent growth from an 11% peak in 2022, with big-box logistics facilities seeing the steepest declines. While infill locations, dense consumer demand, and strong port and airport infrastructure continue to support fundamentals, New York’s industrial sector will most likely not recover in 2026.
Key Findings
- While 11.5 million square feet remains under construction, this is far below the recent peak, signaling limited near-term supply pressure beyond current deliveries.
- Vacancy stands at 7.7%, and rent growth has cooled sharply to -0.2%, shifting negotiating leverage decisively toward tenants.
- Institutional investors remain active, focusing on modern, well-located logistics facilities with strong long-term fundamentals, even as cap rates have expanded toward the 6% range amid rising vacancy.
New York Industrial Supply & Demand Dynamics
Source: CoStar Group, Inc.
New York Demographics
Source: CoStar Group, Inc.
- Unemployment Rate: 4.6%
- Current Population: 14,873,320
- Households: 5,732,767
- Median Household Income: $90,281
The New York metro’s economy remains one of the most powerful and resilient in the world, driven by its scale, diversity, and global connectivity. Finance continues to anchor the economy, while technology has emerged as a major growth engine as firms like Google, Amazon, and Meta expand alongside a fast-growing AI sector. Rising population figures, surging tourism, and major infrastructure investments underscore renewed momentum, though persistent housing affordability challenges remain a key risk to sustaining long-term economic competitiveness.
Top New YorkLeases
Source: CoStar Group, Inc.
- GigaCloud Technology
- Multipet International
- FUJIFILM
- JD Logistics
Population, Labor Force, & Income Growth
Source: CoStar Group, Inc.
New York Industrial Construction
Construction activity in New York’s industrial market is decelerating as the current development cycle winds down. Starts have trailed historical averages for three consecutive quarters and are on pace for their lowest levels in more than a decade in 2025, reflecting muted demand, rising availability, and higher financing costs. While 11.5 million square feet remains under construction, above pre-pandemic norms, this figure is well below the recent peak, and the share of inventory under construction is now slightly below the national average. Development has largely concentrated in suburban submarkets and larger logistics facilities, where elevated availability is likely to persist, even as newer, more efficient buildings remain well positioned in a tenant-favorable leasing environment.
SF Construction Starts
Source: CoStar Group, Inc.
SF Under Construction
Source: CoStar Group, Inc.
New York Industrial Sales
Industrial sales activity in New York has normalized following the elevated volumes of 2021 and 2022, with investment totals settling near historical averages. After roughly $4.5 billion traded in both 2023 and 2024, approximately $3.9 bilion sold in 2025, reflecting higher borrowing costs and softer fundamentals. Yet, optimism is rising as the development cycle nears its end and institutional capital has become more active since late 2024. Recent transactions show investors prioritizing modern, well-located assets with strong long-term leasing appeal, even when short-term occupancy is limited. While pricing has adjusted and cap rates have drifted higher, buyer interest remains concentrated in high-quality industrial product.
New York Industrial Sales Volume
Source: CoStar Group, Inc.
By the Numbers
Q4 2025 | Source: CoStar Group, Inc.
- Sales Volume: $878M
- Price Per SF: $281
- Cap Rate: 6.0%
- Vacancy Rate: 7.7%
- Rent Growth: -0.2%
- Asking Rent Per SF: $19.84
- SF Under Construction: 11.5M
- SF Delivered: 1.5M
- SF Absorbed: 2M
