Long Island's office market has been tightening under the radar, with occupied space rising for four straight quarters even as leasing activity cooled. Vacancy has slipped and asking rents have nudged higher in recent quarters, with most of the improvement clustered in better quality buildings and a few stand-out submarkets, leaving brokers and landlords quietly optimistic about a slow, uneven recovery.
Recent analysis captures that split personality. CoStar Analytics reports that the net change in occupied space on Long Island stayed positive for four consecutive quarters even while gross leasing volume slowed. According to CoStar, the Long Island market continues to outperform the broader U.S. on several measures despite the deceleration in new deal activity.
Local brokerage data tell a similar story. Newmark logged roughly 523,128 square feet of positive net absorption for 2025, pegging fourth quarter vacancy at about 10.6% and the overall availability rate near 12.0%. Newmark also noted that asking rents climbed to roughly $33.13 per square foot and that no office projects were under construction at year end.
Earlier Momentum And Where It Came From
Industry tracker Colliers also spotlighted pockets of strength in 2025, recording 361,590 square feet of positive net absorption in the second quarter and a drop in availability to about 12.1%. As Colliers notes, demand has been heavily concentrated in higher quality buildings and in select Nassau County submarkets that already had strong tenant interest.
Why Occupancy Can Rise Even As Leasing Cools
Analysts point out that the numbers reflect market mechanics more than a sudden new leasing surge. Renewals, along with smaller renewals, can keep total occupied square footage stable or even rising when fewer big new leases are hitting the books, and the lack of new construction pushes tenants toward the most desirable existing product. Newmark also highlights education and healthcare as local employment pockets that have helped support steady office demand.
What Landlords And Tenants Are Doing Now
That backdrop is nudging owners with capital to pour money into renovations and tenant friendly amenities, while occupiers shop carefully for modern, well located space. Brokers say tenants continue to prioritize Class A product, a trend Colliers underscores, which widens the performance gap between upgraded buildings and aging stock that has not kept up.
As a result, the deal mix has shifted. There are more renewals, smaller new leases and a steady flow of employer driven returns to the office rather than splashy corporate relocations. With limited new supply and improving occupancy, negotiating leverage is starting to tilt slightly toward owners in the strongest submarkets, though it is hardly a full-blown landlord market.
Outlook
Nationally, office tenant demand moved back into positive territory in 2025, a shift that could help sustain suburban markets like Long Island even if leasing velocity eases, according to CoStar. On the ground, data from Newmark and Colliers suggest any recovery will be gradual and uneven. Owners of upgraded, well located buildings are positioned to see the most benefit, while older properties may face longer lease-up timelines or mounting pressure to consider conversions.
For Long Island businesses, brokers and investors, the takeaway is pragmatic. The market is no longer in free fall, but future gains are likely to play out block by block, and building by building, depending on which addresses get improved, marketed and leased first.
