Long Island Retail Market 2025: Resilient, Evolving & Thriving

Long Island Retail: Reinventing, Not Retreating

Key Highlights:

• Retail vacancy on Long Island remains low at just 5%, outperforming the 10-year average.

• Average asking rent stands at $35 per square foot, about 40% higher than the national average.

• Construction is limited and strategic, with only 470,000 square feet in the pipeline.

• New tenants reflect evolving demand, including medical, wellness, and recreational users.

If you follow the headlines, you might think retail is on life support. Stories of “dying retail” have become common, painting a picture of empty stores and shuttered malls. But anyone actively leasing space, working with property owners, or tracking deals knows the real story: Long Island retail isn’t dying — it’s evolving and thriving.

Yes, the second quarter of 2025 brought some notable move-outs — about 400,000 square feet of net vacancies, including 82,000 square feet at Melville Mall and 20,000 square feet at DSW Plaza in Lake Grove. These figures grab attention but miss the bigger picture.

Retail Vacancy on Long Island: Still Exceptionally Tight

Even after those losses, retail vacancy on Long Island is just 5%, well below the 10-year average. This isn’t a distressed retail market; it’s a competitive one with limited space and high demand.

Long Island Retail Rents Show Strength

The average asking rent of $35 per square foot speaks volumes. That’s roughly 40% above the national average, reflecting Long Island’s strong consumer base and premium market positioning.

Why the resilience? A key factor is Long Island’s affluent population. The median household income here is 72% higher than the national average, supporting steady consumer spending. After a period of flat population growth, Long Island is also seeing residents return — further boosting retail stability.

Smart Construction Keeps the Market Balanced

One of the secrets to Long Island’s retail health is disciplined development. With only 470,000 square feet under construction (less than 0.3% of the market’s total inventory), overbuilding isn’t a risk. Developers here build with purpose, not speculation.

A prime example: Simon Property Group’s transformation of Smith Haven Mall’s former Sears site into a 170,000-square-foot medical hub for Stony Brook Medicine. That’s not decline — that’s forward-thinking adaptation.

The New Face of Long Island Retail

Today’s retail spaces aren’t just for big-box chains. Medical offices, wellness centers, specialty grocers, fitness studios, and even pickleball clubs are filling former traditional retail footprints. These tenants aren’t temporary — they’re designed for long-term success and high foot traffic.

Recent deals highlight this shift:

• 56,000 square feet for pickleball in Medford

• 53,000 square feet for Uncle Giuseppe’s at Wheatley Plaza

• 30,000 square feet for Amazon Fresh at Manetto Hill Plaza

• Leases by Crunch Fitness, Aldi, Planet Fitness, Sephora, and more

Investors Are Confident in Long Island Retail

In 2024, retail property sales hit $837 million — driven by institutional investors and high-net-worth buyers. Major players like Simon, Kimco, and the Albanese Organization continue to invest in Long Island’s retail future.

What’s Next for Long Island Retail?

While rent growth has plateaued for now, the fundamentals point to a positive outlook. Expect modest rent increases by early 2026, thanks to limited supply, low vacancy, and demand from nontraditional tenants.

Bottom line: Long Island retail isn’t shrinking — it’s transforming. As consumer needs change, so do the tenants and uses. But one thing remains constant: Long Island is one of the nation’s most resilient and sought-after retail markets.

Forget the “retail is dead” narrative. On Long Island, retail is very much alive — and ready for what’s next.