Richard Diller Says Commercial Real Estate Market in Long Island and Metro New York Areas Will Improve with Economy and Jobs Reports
But Adds Main Challenges May Include Rising Costs and Lack of Prime Locations
January 6, 2015
PLAINVIEW, NY — Richard Diller, Manager of Commercial Real Estate, Charles Rutenberg Realty Inc., says he anticipates growth in the Commercial Real Estate market in Long Island and the New York metropolitan area. “There is good news on the economy, in terms of steady expansion and increased employment. This will certainly help the Commercial Real Estate market, but not necessarily equally or all across the board,” he says.
“As to apartments, we anticipate that the already tight market conditions for apartments throughout the New York metro area and Nassau and Suffolk Counties will continue,” Mr. Diller says. “Rental rates will also continue to move higher.”
Mr. Diller heads Charles Rutenberg Realty’s Commercial Real Estate division and has more than 25 years of Commercial Real Estate experience as an Investor and a Broker. Prior to joining the Agency, he was the Founding Member of Equity Programs, Ltd., a Real Estate firm based in Manhattan. He was also President of Equity Realty Securities Corp.
On December 8, 2014, the Federal Reserve Bank of Chicago released its survey of participants from its 28th Annual Economic Outlook Symposium. Citing the Labor Department’s recent announcement that 321,000 jobs were added in November 2014 — the most in almost three years — the respondents said they foresee a drop in the unemployment rate from the current rate of 5.8% to 5.6% by the fourth quarter of 2014. The Bureau of Labor Statistics further added that the unemployment rate for the construction sector was at 7.5% in November 2014. While that is higher than the national rate, it is also an improvement over last year’s rate of 8.6%. The construction industry also saw the addition of 231,000 jobs year over year.
The prices for warehouse space will also rise, Mr. Diller says, as a result of shrinking vacancies. “There are higher vacancies on Long Island, particularly in central and eastern Suffolk County but the market is improving.” Recent data by Cushman Wakefield shows that the vacancy rate for the third quarter of 2014 in Nassau County was 8.9%, compared to 9.6% the previous quarter. Although the vacancy rate in Suffolk remained the same at 9.1%, Central Suffolk’s vacancy rate fell from 9.5% to 8.8% and Eastern Suffolk’s rate went from 12.5% to 10.2%.
The retail market also proves to be vibrant. Cushman & Wakefield found that ten of the eleven retail submarkets in New York City saw an increase in the rental rates as the result of overall growth and lower vacancy rates. Lower Manhattan saw 52% growth year over year. Although these are positive signs, “a growing economy should also help well-located properties in the New York metro area, but retail properties in inferior locations with other deficiencies such as lack of parking, poor visibility and a hastily assembled mix of tenants will continue to lag behind other more sought-after properties in the retail marketplace,” Mr. Diller says. “The absorption of these properties will take much longer to recover, and these buyers will be seeking higher capitalization rates.”
Charles Rutenberg Realty is one of the nation’s fastest-growing Agencies with nearly 1,000 Agents on Long Island, Queens, Westchester, and the Bronx. For more information, visit www.crrli.com.