Developers Expect High Average Incomes and Population Growth To Validate Ambitious Pipeline
Overall, the construction pipeline is active with almost 3,800 units in the works, representing nearly 7% of Long Island’s existing apartment inventory. CoStar’s construction calendar projects 3,000 units to be completed over the next 18 months, which will increase pressure on occupancy levels in the near term. The average vacancy rate was 4.3% in mid-July and base-case forecast models expect it to peak next year at just over 5%. While tenant demand is expected to initially lag the new supply, the appeal of renting on Long Island should support higher occupancy levels in the long term.
Perhaps no company has placed a bigger bet on Long Island than local developer Tritec Real Estate. The family-owned business based in East Setauket is spearheading three of the five largest apartment development projects in the pipeline, led by the massive phase II of its Station Yards project in Ronkonkoma that will have a total of 563 units when completed next year.
The firm’s optimism around the future demand for these units likely stems from the rosy demographic outlook for the area. Oxford Economics projects Long Island will continue to see a rebound in population growth in the years ahead, led by an increase of 0.8% in 2023, which would be double the national average. This includes year-over-year net population growth of at least 15,000 people beginning this quarter and continuing through 2024.
Read the full article in CoStar.
