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Something’s happening with the industrial sector on Long Island, and some of the most established names in commercial real estate are taking notice.
While historically known as an underserved market for the sector, industrial activity on Long Island has been ramping up to record levels over the past year.
According to a report by JLL (JLL), 1.1 million square feet of industrial was leased in Q2 of this year, nearly doubling the five-year trailing quarterly average and demonstrating that the region’s sector strength is growing rapidly.
“While leasing volume [in industrial] has reverted to pre-pandemic levels in most of the Northeast region, leasing in Long Island continued to accelerate higher as pent-up demand hadn’t been able to transact in years prior because of the lack of quality options,” the JLL report reads.
In addition, there is currently 2.4 million square feet of industrial under construction in the region, “the highest construction volume on record,” according to the report.
One of the major developers making strong inroads into the region is Rockefeller Group, which currently has 675,000 square feet of industrial in development on Long Island.
“Over the last few years, there’s been a stronger influx of Class A industrial distribution here. But to have a Class A product has traditionally been very hard in a supply-constrained, land-constrained market,” said Heath Abramsohn, Vice President and Regional Director for Rockefeller Group. “Distributors have been coming in from other regions to supply Long Island. So you have a very densely populated market with strong incomes that have heavy buying power, and they’re being serviced inefficiently.”
While the name Rockefeller conjures up images of Rockefeller Center — the company’s first development, back in the 1920s — Rockefeller Group has also been developing industrial properties since the late 1970s, when it entered the market with the International Trade Center in Mount Olive, N.J. (Rockefeller Group sold the development in the 1990s.)
This gives Rockefeller Group one of the longest track records in the sector among major national developers.
Over the past decade, the company has been ramping up nationwide industrial activity exponentially, and currently has 16 million square feet of industrial property planned or under construction, with half of that in the Northeast.
Recent completions in the region include the 345,600-square-foot Rockefeller Group Logistics Center in Eastampton, N.J., which the company sold earlier this year for $83 million, and the 400,000-square-foot Middlesex Logistics Center in Middlesex, N.J. Current projects under construction in the region include a 655,000-square-foot distribution facility in Spotswood, N.J., and a 147,000-square-foot distribution facility in Piscataway.
With their recent entry into the Long Island industrial market, Rockefeller Group comes full circle, expanding back into New York, where the company began. It’s an opportunity, according to Abramsohn, to deliver a level of industrial product that has been very difficult to find on Long Island.
The company’s first industrial project in Long Island was the Class A, 172,622-square-foot Rockefeller Group Logistics Park distribution building at 55 Paradise Lane in Bay Shore. The project stands out among surrounding buildings for its modern design attributes, including 36-foot clear heights, 40 trailer doors and 270 parking spaces on nearly 11 acres. Upon completion in March, it immediately became one of the premier distribution facilities on Long Island’s South Shore. JLL is marketing the building for lease.
“Moving into the Long Island market was an expansion of existing capabilities for us,” said Abramsohn. “We had looked at Long Island and other parts of New York in the past. We were comfortable with the labor, distribution channels, major roadways, population density and income levels, and fortunately an opportunity presented itself.”
Another major project of late for the Rockefeller Group is the Crossways Logistics Center in Woodbury, N.Y., located in the Town of Oyster Bay on Long Island.
The company, through an assemblage, purchased the land for the 145,000-square-foot distribution center, located on 9 acres, in December 2021, and expects the project to be ready to lease by year’s end. Cushman & Wakefield (CWK) will handle leasing for the center.
Crossways will also include 36-foot ceiling clear heights, 54-by-50-foot column spacing, space for more than 270 cars, and 35 dock doors,18 spaces of trailer parking and an area for dedicated fleet parking.
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John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
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The Law Offices of John Caravella, P.C. does not own this content. This content was created by COMMERCIAL OBSERVER CONTENT STUDIO . To view the full article, please click here.