"The commercial market has too much inventory and no demand," said Jay Orsini, a real estate agent for Douglas Elliman.
A recent report by Avison Young found leasing volume has fallen 42% below the 20-year annual average.
"We had one client looking for about 8,000 square feet and there were over 30 buildings for them to choose from between Nassau and Suffolk [counties]," Avison Young managing director Ted Stratigos said. "And that's a lot."
Although 42% may seem like a lot to overcome, Stratigos said he believes it's just temporary. Folks working remotely is one reason why there are so many vacant office buildings. However, he said companies are not signing long-term leases right now.
"2020 and even 2021 is not the time to be making any long-term decisions," Stratigos said.
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Douglas Elliman has 60 office space listings on Long Island and there is barely any activity, Orsini said. Tenants have an advantage because landlords are willing to negotiate prices and terms.
"When we used to rent a commercial lease, the term used to be seven to 10 years," Orsini said. "Now the landlords are downgrading those terms to three to five years and putting COVID protection clause in there."
Stratigos said companies are slowly bringing back their workers. He believes it could take two years until the commercial market turns back around.