As Demand for Office Remains Sluggish, Investors Look to Industrial and Logistics Conversions

Growing e-commerce has driven demand for warehouse and distribution space and has sparked the conversion from office to industrial uses on Long Island. This conversion wave is all the more notable as it marks the reversal of a prior trend from the early 2000s, when growing demand for office space spurred a wave of industrial conversions to office space. Looking forward the office-to-industrial conversion trend appears to be picking up speed, especially in the wake of the pandemic, with office demand below long-term averages. CBRE is tracking five potential office-to-industrial conversation projects, totaling at least 521,000 sq. ft. There is 202,000 sq. ft. projected for completion in 2023 and an additional 319,000 sq. ft. in the pipeline, with completion dates not yet announced.