Long Island Market Report · Q2 2026
Nassau and Suffolk Retail: A Landlord’s Market That Just Keeps Getting Tighter
The story of Long Island retail real estate in 2026 is the story of leverage shifting decisively to landlords. Across Nassau and Suffolk, the data is pointing in one direction: less supply, more demand, faster lease velocity, and bidder depth on quality assets that we haven’t seen since 2016. Here’s our mid-year readout on where the market stands and where it’s heading.
The Supply Story Is the Story
New ground-up retail construction on Long Island has been near zero for nearly five years. Land scarcity, entitlement timelines, and construction pricing have collectively made new builds uneconomic outside of a handful of mixed-use redevelopments. The result: every quality box that comes back to market is being re-tenanted at a meaningful mark-to-market, and the bid for second-generation space is stronger than the bid for new product was a decade ago.
Submarket Spotlight
Nassau North Shore
Vacancy: Sub-3% across grocery-anchored product. Rent growth on small-shop space is running ahead of 10% year over year. Bidder depth on dispositions remains the deepest on the Island.
Nassau South Shore
Vacancy: 4–5% with strong demand from medtail, fitness, and QSR. Outparcel pad activations are generating the highest IRRs in the submarket as drive-thru tenants compete for limited locations.
Suffolk Central
Vacancy: 5–6% trending tighter. Grocery operators continue to drive net absorption, with ALDI and Lidl both touring multiple sites. Off-price boxes in the 22,000–30,000 SF range remain in short supply.
Suffolk East End
Vacancy: Highly seasonal but structurally tight. Specialty grocery, fast-casual, and experiential retail are reshaping the tenant mix in Hamptons-adjacent centers.
What’s Leasing
The tenant categories driving the bulk of new lease velocity in our pipeline:
- Grocery: Lidl, ALDI, specialty operators, and traditional supermarket remodels.
- Off-price: TJX banners, Burlington, Ross, and Five Below continuing to absorb junior-anchor space.
- Medtail: Urgent care, dental, dermatology, vision, and PT operators backed by PE rollups.
- Quick-service: Chipotle, CAVA, Chick-fil-A, Raising Cane’s, and Starbucks all targeting outparcel pads with drive-thru.
- Fitness and wellness: Boutique studios and value-tier fitness brands are absorbing 2,500–5,000 SF small-shop space at a steady clip.
Capital Markets Snapshot
The capital story is as constructive as the leasing story. Best-in-class grocery-anchored deals are clearing inside of 6% cap rates, multiple-offer situations are the norm rather than the exception, and 1031 exchange capital is keeping the buyer pool unusually deep for this point in the cycle. Sellers who waited out the 2023–2024 standoff are being rewarded with the strongest pricing environment in nearly a decade.
What to Do About It
- Test the market on stale rent rolls. If you haven’t priced your asset against current comps in 18–24 months, you don’t actually know what it’s worth today.
- Activate underutilized parcels. Corner pads, outparcels, and surplus parking are the highest-IRR projects in the existing portfolio universe.
- Lock in long-term tenants while leverage is yours. The strongest tenants are accepting longer terms and harder commitments than at any point post-COVID. Use it.
Curious what your Long Island center could trade for or release at today?
The Schuckman Realty team has decades of submarket-specific data and an active buyer and tenant pipeline.