In the second quarter of 2026, about 550,000 square feet of finished, empty warehouse space in Yaphank stopped counting as available. No tenant signed for it. The owner proposed turning the three buildings into a data center, so the space came off the availability list. In CBRE's Q2 2026 Long Island industrial report, that withdrawal is the main reason Eastern Suffolk vacancy fell 550 basis points in one quarter, to 7.6%.
Two weeks after that quarter closed, the Town of Brookhaven passed an 18-month moratorium on data centers. The space is now off the market for a use the town won't process, in a submarket where asking rents are falling and more than half a million square feet of speculative warehouse product is due in 2027. Anyone underwriting large-format industrial east of Route 112 should treat the Q2 vacancy figure as a byproduct of how the space was classified, not as a sign of stronger demand.
The buildings behind the number
Brookhaven Logistics Center sits at 1001 Expressway Drive North in Yaphank. It is a three-building campus of about 550,000 square feet, built on a 42.1-acre portion of a 71.4-acre parcel. The buildings measure 203,548, 176,670 and 169,724 square feet. Long Island Business News reported in June 2024 that they were being marketed as new industrial space. By March 2026 the campus was still unleased.
The owner, WF Industrial XII LLC, is an affiliate of Wildflower. It calls the conversion the Brookhaven Digital Infrastructure Facility. According to Newsday's June 2026 reporting, the plan uses all 549,000 square feet, draws 176.6 megawatts continuously, and adds a new substation tied to a nearby 138-kV line. No tenant has been named, and the operating date has moved to late 2027 or early 2028. Wildflower's director of development, Michael Bowden, described the project as a $1 billion private investment with 50 permanent operating jobs once complete.
That proposal is what took the space out of the availability count. For anyone reading the Eastern Suffolk vacancy rate, what matters is whether the proposal can actually move forward.
Why the conversion is stalled until at least 2028
On July 16, 2026, the Brookhaven Town Board voted unanimously for a data-center moratorium that runs through December 31, 2027. The only exception for projects already in the pipeline is narrow. As the Suffolk County Planning Commission staff report reproduces it, the law does not apply to:
applications which are filed, duly accepted as complete and pending, as of the effective date of this chapter herein.
Wildflower's application didn't meet that test. Town Attorney Annette Eaderesto said it was incomplete when the moratorium passed and will not be processed during the 18-month pause, according to TBR News Media. Town Supervisor Dan Panico said the town needed a longer pause than the state's, without "so many carve-outs and loopholes."
That state pause came two days before the town vote. Executive Order 62, dated July 14, 2026, directs the Department of Environmental Conservation to hold incomplete discretionary permit applications for data centers of 50 MW or more until the Department of Public Service finishes a statewide environmental review. A 176.6 MW load is well above that line.
The incentive side has weakened as well. The Brookhaven Industrial Development Agency's May 27, 2026 minutes say the board had already voted to send WF Industrial XII a default letter and recapture benefits over missed job-creation targets, and that the consensus was to move forward with terminating the project. In the same minutes, the board's consensus was "to not support data centers." No final IDA action on the project has been reported since June.
So the 550,000 square feet are in limbo. The town won't accept the proposed use until 2028 at the earliest, and the incentive agency has said it won't support that use. CBRE's quarterly figures don't treat the space as available. The space can come back onto the market whenever the owner chooses to relist it.
The rent line points the other way
If Eastern Suffolk had actually tightened by 550 basis points, landlords would be raising asking rents. They are cutting them. In Q2 2026, CBRE recorded the largest rent decline of any Long Island submarket in Eastern Suffolk.
| Submarket, CBRE Q2 2026 | Average asking rent | Change q/q | Change y/y |
|---|---|---|---|
| Eastern Nassau | $21.66 | +4% | +4% |
| Central Suffolk | $18.84 | −2% | +2% |
| Western Nassau | $18.33 | +1% | −11% |
| Eastern Suffolk | $16.23 | −6% | −7% |
| Western Suffolk | $15.82 | −1% | +3% |
The Island-wide figure held at $18.85 per square foot in Q2 2026, up 1% year over year. Eastern Suffolk landlords cut asking rents in the same quarter their vacancy rate dropped the most, so the vacancy drop wasn't driven by tenants competing for space.
The two major broker reports also disagree on the overall market. CBRE put Q2 2026 vacancy at 7.0% under a report titled "Construction Pipeline Surges Amid Softening Industrial Fundamentals." Cushman & Wakefield put it at 4.9%, recorded a record 1.7 million square feet of new leasing, and reported a market-high asking rent of $19.31. Neither report explains the gap. Both use different inventory and methods, and the Yaphank withdrawal is spelled out only in CBRE's commentary. Since the two reports can't be reconciled, the question to ask is how much of a given quarter's vacancy change came from space actually being leased.
The 2027 supply calendar in Eastern and Central Suffolk
Demand in the east is real. Cushman & Wakefield reported that nearly 75% of Q2 2026 leasing was in Suffolk County. The largest deals were Home Depot's 414,000-square-foot build-to-suit at the Long Island Rail Terminal in Yaphank and OnTrac's 121,270-square-foot lease of a new building at 2950 Veterans Memorial Highway in Bohemia. The trouble is that more large-format space is set to reach the market at about the same time the Yaphank campus could come back.
- Home Depot, Sills Road, Yaphank. A NorthPoint build-to-suit of about $157 million. Construction started in spring 2026, and Newsday's July reporting put shell completion in fall 2027. The company's IDA application projected occupancy by May 2027 under a 15-year lease. The building is pre-leased, so it absorbs demand rather than competing for tenants.
- Ares, North Bellport. Four speculative buildings totaling 528,818 square feet on Station Road between Woodside Avenue and Sunrise Highway, due in mid-2027. The Brookhaven IDA denied the project tax breaks because it had no tenants. IDA CEO Lisa Mulligan told LIBN, "Our board has a moratorium on spec industrial projects."
- Ares, Yaphank. An approved 332,970-square-foot warehouse on 25.6 acres beside Baseball Heaven. It had no tenant as of March 2026, and Ares didn't apply for IDA benefits.
- Brookhaven Logistics Center, Yaphank. About 550,000 square feet already built. The moratorium expires December 31, 2027.
- Amazon, Holbrook. A 4.2 million-square-foot fulfillment center on 140 acres, filed with the Town of Islip on July 16, 2026, as LIBN reported. Amazon will occupy it, so it won't add leasable space. It does mean one of the region's largest logistics users may need less third-party space in the area once it opens.
Cushman & Wakefield's Q2 2026 data puts 654,318 square feet under construction in Eastern Suffolk alone. Add the two Ares projects to the Yaphank campus and roughly 1.4 million square feet of unleased big-box space could be competing for tenants in Eastern Suffolk in late 2027 and early 2028.
Where scarcity actually shows up in the numbers
Cushman & Wakefield gives the reason development keeps moving east: sites are becoming scarce in Nassau and Western Suffolk. Western Suffolk had the lowest vacancy on the Island in Q2 2026 at 2.9%. Recent small-bay sales on the Nassau-Suffolk line show what that scarcity is worth.
- 1845 New Highway, Farmingdale. 33,500 square feet leased to Jet Line Products, bought by Faropoint for $6.35 million in September 2026, about $190 per square foot.
- 10 Executive Blvd., Farmingdale. A 21,895-square-foot sale-leaseback with Enzo Life Sciences staying as tenant, $5.25 million in July 2026, about $240 per square foot.
- 229 Broadhollow Road, Farmingdale. 40,717 square feet, about 85% occupied, $7.725 million in July 2026 at an implied cap rate of about 7%.
- 840 S. Broadway, Hicksville. The former Grumman and Coral Graphics plant, 55,789 square feet on 4.66 acres, sold for $10 million in August 2026. The buyer may raise the roof to take clear height from 12 to 28 feet.
The Hicksville deal is a buyer paying full price for a 12-foot building and planning to raise the roof rather than build new, because the land to build new isn't available in that part of the Island. In Eastern Suffolk the situation is the reverse. Land is available, new buildings are going up on spec, and asking rents have dropped.
Questions to answer before pricing Eastern Suffolk big-box exposure
- How much of the subject submarket's latest vacancy change came from leasing, and how much from space being withdrawn or reclassified?
- What does the rent roll assume for renewals in 2027 and 2028, when the Bellport and Yaphank spec buildings could be leasing at the same time?
- If an exit or refinance falls after December 31, 2027, does the model allow for the Yaphank campus being back on the market?
- If the strategy depends on IDA benefits, has the Brookhaven IDA's stance on speculative industrial been priced in?
FAQ
Can Brookhaven Logistics Center still become a data center? Not before the town moratorium expires on December 31, 2027, and only if Brookhaven's new zoning allows it. The state review under Executive Order 62 is a separate hurdle for facilities of 50 MW or more.
Does the Home Depot project add to Eastern Suffolk vacancy risk? No. It is a build-to-suit with a 15-year lease, so the building is leased before it opens.
Which Q2 2026 vacancy rate is correct, 4.9% or 7.0%? The two reports measure the market differently and don't reconcile with each other. Q3 2026 reports are due in October and will show whether the Eastern Suffolk number holds.
Tide Realty Group underwrites Long Island industrial assets building by building, separating space that was leased from space that was withdrawn and modeling the 2027 delivery schedule for each submarket. If you hold or are considering big-box exposure in Eastern Suffolk, or are weighing small-bay assets in Farmingdale and Hicksville, we can model both scenarios with you. Rise With Us.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
