18 LONGISLANDPRESS.COM • OCTOBER 2020
LANDLORDS’ RENT CONCESSIONS EASE PANDEMIC PAIN
Net effective office rent, calculated including
the cost of concessions, for the
second quarter dropped 6.6 percent in
the 15 largest U.S. markets, according
to CBRE. Base rent before concessions,
however, declined by only 1.1 percent.
The average length of free-rent periods
rose to 10 months, or nearly a year, up
13.7 percent from the first quarter.
Tenant improvement allowances, money
landlords offer to improve a space,
increased by 5.1 percent to $75.57 per
This came as office-leasing activity tumbled
43 percent in the second quarter
from a year earlier, according to Collins.
Philip Heilpern, a senior vice president
at CBRE’s Long Island office in Melville,
said relatively few deals have taken
place here since the pandemic started,
as few leases expired.
“Like almost every other market in the
country, we’ve had a fairly dramatic
drop-off in the number of deals in the
market,” Heilpern said. “ Everything
inessential has been put on hold.”
He said Long Island office renters “have
enjoyed a slight uptick in landlord concessions,”
but at least so far there hasn’t
been a surge.
“We’ve had dropping vacancy rates
and rising rental rates in the last few
years,” Heilpern continued. “Tenants
in the market now are being wooed a
little more aggressively by landlords
who want to make deals and get their
Darren Leiderman, executive managing
director of Colliers International’s LI
office, in Jericho, said the Island office
market remains tight.
“There’s not a lot of space,” Leiderman
said. “We haven’t had much building in
the last 20 years.”
He said the Paycheck Protection Program
helped companies pay office rent,
benefiting both tenants and landlords.
“There haven’t been that many deals
signed post-COVID,” he said. “Some haven’t
been affected. Some have had more
leniency and flexibility on concessions.”
An increase in working remotely is
leading to more subleases hitting the
market as well as workers separated by
greater distances. And that is impacting
the market as well.
“People still have leases,” Leiderman
said. “People are saying work-fromhome
may impact the market. If you
have a lease, you still have to do something
with the space. Do you spread
people out; do you sublease?”
New York City-based companies are
shifting more Long Island residents
to offices closer to home, fueling local
demand, Heilpern said. Workers often
work at home or travel to a closer office,
instead of making the daily commute
from LI to Manhattan.
“Clients said they plan to move some
employees who live on the Island and
work in New York City to their Long
Island office,“ Leiderman agreed.
Heilpern said Long Island hasn’t seen
“a dramatic drop in asking or taking
rents,” even if concessions such as free
rent are up. While deals are being
sweetened, base rent at least so far
hasn’t been impacted.
Leiderman said free rent, which initially
was used to help companies cover moving
costs, now provides leniency, while
maintaining landlords’ base rent.
“When you refinance, you carry that
higher rental rate,” Leiderman said of
landlords. “It balances out.”
continued from page 17
“Tenants in the market now are being wooed a little
more aggressively by landlords,” said Philip Heilpern.
55575 Main Road, Southold
55575 Main Road, Southold
Family owned and operated craft butcher
market and old school deli located among the
vineyards and salt water on the North Fork of
Long Island, New York. We o er our customers
only the best quality, homemade, hearty food,
and USDA prime-aged craft butcher cuts for
over 50 years. We take pride in our customer’s
bragging rights. Your personal farm-to-table
all-American craft butcher.
Tues-Thurs: 6am-3pm | Fri-Sat: 6am-5pm
Monday Sun – 6am-Saturday,3pm ( closed 6 am –Mon)
5 pm Sunday, 6 am – 4 pm
631 765 3575 l www.southoldwaysidemarket.com
631 765 3575 | southoldwaysidemarket.com
Curb Side Available All Day - Daily Grocery Delivery
Oct And Fall Specials!
Our Annual Vineyard Harvesting
We’re Doing Roasts, Smoking Meats-From Prime Rib To Roast Beef
LI Famous Country Stews And Soups
Charcuterie Board Section Plus Grab And Go Cheese Board Items
Be Here For Our Annual "Oktoberfest". WE HAVE IT ALL!