Cushman & Wakefield reports positive net absorption and declining vacancy across Long Island office and industrial markets in fourth quarter of 2025

Long Island, NY Cushman & Wakefield, a global real estate services firm, released its Q4 2025 MarketBeat Reports, highlighting a strong close to the year for Long Island’s office and industrial markets. Both sectors finished 2025 with declining vacancy rates and positive net absorption for the first time in several years, signaling improving fundamentals amid stabilizing economic conditions.

Long Island’s office market vacancy declined to 13.1%, down 130 basis points year-over-year. Average asking rents rose modestly to $33.67 per s/f (psf), reflecting quarter-over-quarter increases in both Nassau and Suffolk counties. New leasing activity surpassed 1.6 million s/f in 2025, ending the year just 3.5% below 2024’s full-year total, while renewal activity increased as tenants balanced relocation costs against favorable landlord incentives. Net absorption totaled approximately 490,000 s/f, marking the first positive year for absorption since 2021.

“The office market closed 2025 on much stronger footing than where it began,” said Dimitri Mastrogiannis, senior research analyst at Cushman & Wakefield. “Consistent leasing activity, rising renewal volume, and sustained vacancy compression all point to a market that is stabilizing as tenants make more deliberate, long-term occupancy decisions.”

The industrial market also ended the year with renewed momentum. Average asking rents climbed to a new market high of $18.75 per s/f, while the vacancy rate declined for the third consecutive quarter to 5%. New leasing activity totaled 1.3 million s/f in Q4, the strongest single quarter since Q1 2022. Net absorption turned positive for the first time since 2022, as tenant demand continued to outpace new supply.

“After a prolonged period of tenant caution, industrial users are clearly re-engaging,” said Mastrogiannis. “The surge in fourth-quarter leasing and return to positive absorption underscore renewed confidence in Long Island’s industrial fundamentals, even as development activity slows and the pipeline resets for 2026.”

The industrial development pipeline moderated in 2025, with approximately 519,000 s/f delivered, while nearly 1.4 million s/f remains under construction, much of which is expected to be delivered next year.