What’s Happening in Long Island | The Stoler Report-New York's Business Report

What’s Happening in Long Island | The Stoler Report-New York's Business Report

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♪ [Theme Music] ♪ ♪ [Theme Music] ♪ >>> Michael: Long Island, lots of things are happening in Long Island. My apple over there is very shiny for Long Island. So, to discuss the developments taking place in Long Island, I've assembled this group of banker, developers, to, to tell me what's happening in Long Island. My guests include the man with the money, Brian Terry, who is the regional head for real estate lending TD Bank. Steven Dubb, who's the principal at the Beechwood Organization. And last but not least, Scott Burman, who's also -- you're president of -- principal at the Engel Burman? >>> Scott: Principal of Engel Burman president of the construction division. Yes. >>> Michael: So, let's talk about some unique things that you're doing and what's happening. Talk about Long

Beach. I mean, how many years? 40 years? >>> Scott: Sure. Yeah. So, we've got a very exciting new project that's in construction in Long Beach. Was a vacant six-acre parcel on the Atlantic Ocean that like you said, it's been sitting vacant for 40 plus years. Bunch of developers took a stab at developing it over that timeframe. And we recently

purchased it and we are in construction to build a 438-unit residential project, which will be 200 units of condominiums and a 238-unit rental building. >>> Michael: How high is the buildings? >>> Scott: The condo towers are nine stories. The rental tower is 10 stories. So, it'll be a two-level parking podium. And above that, we'll do the two nine story condo buildings in the two-- 10 story rental building.

>>> Michael: Any retail or amenities down -- >>> Scott: There will. So, we're doing a bunch of restaurants along the boardwalk. Grab and go, and a couple of restaurant concepts. We're working with a bunch of different prospects now, but that's a super exciting element as well for the community. >>> Michael: Okay. With regard to that, how responsive was the government, you know, the city of Long Beach, the, you know, the economic development, the IDA, in helping you out in the project? >>> Scott: So, the city really did, did welcome the project.

Again, it's been sitting there vacant for, for so long. It's a huge economic stimulus for the community. To make a project like this work with a rental component, you really do need some sort of tax incentives. And that was part of our process as well. >>> Michael: When do you think part of the development will be ready? >>> Scott: So, it's a 36-month schedule in total. We're gonna

deliver the first building in 30 months, second building in 33 and the final condo tower at 36. >>> Michael: When do you plan to open up your sales office? >>> Scott: So, we're working through that now. I think it's probably gonna be about a year out from delivery is when we'll start really opening up for sales and, and marketing. >>> Michael: So, let's go -- you're opening up the Selby today? >>> Steven: Yeah. So, we're starting leasing at the Selby today. >>> Michael: Okay. So, tell me about the Selby, because that's

probably the premier luxury rental in the community of, in Nassau County, definitely. >>> Steven: Yeah. So, so it's 237 apartments and hotel rooms. 27 hotels, the rest are rental apartments. They're going to be the nicest rental apartments. >>> Michael: This is in Westbury, right? >>> Steven: This in Westbury. Yeah. Overlooking Eisenhower Park. So, Eisenhower Park's about 900 acres. And the

apartments at the Selby look at the golf course at Eisenhower Park. So, the views are beautiful. The apartments are condo sized and have finishes that are nicer than most of the luxury condominium product that's for sale on Long Island. So, we have all Viking appliance kitchens. We have seven-inch wide plank oak floors, German cabinets from a company called Störmer, brushed brass fixtures, and an amenity package that's pretty unrivaled by anything else that's been built in Nassau or Suffolk County. >>> Michael: Is it geared to 55 and older? >>> Steven: So, it, it's not age restricted, but most of our renters are gonna end up being over 50. We have a sister

building to the Selby that we opened in 2018 called the Vanderbilt. That's 195 units. And what we found there is most renters are ha-- tend to be over 50, just by nature of where they are in the cycle of life and what they're looking for in terms of housing. So, they tend to be renters who used to own homes on the North Shore or the South Shore of Nassau County. And don't want to pay 40, 50, $60,000 a year in real estate taxes anymore. Cuz their kids are no longer in the public

school districts and they don't need so much house. So, they're accustomed to certain style of living, and they love the no maintenance lifestyle. They don't have to deal with a landscaper, or snow removal, cleaning the gutters, et cetera, all that stuff. And so, what we build both at the Vanderbilt and what we're, we've, we built at the Selby is attractive to them. >>> Michael: Are you still seeing a number of people from New York City moving out, let's say buying a sec-- second home out in Long Island, or changing their residence to be out in Long Island, because they don't want to be in New York? >>> Steven: Well, April of 2020, May of 2020, we had a lot of renters come out to the Vanderbilt from the city who just wanted to clear out of the city. We still get renters who,

who come from New York, but it's more of a trickle than the flood it was early in the pandemic. >>> Scott: We're seeing the same. We brought about a thousand rental units online over the last couple of years. >>> Michael: Which communities were --? >>> Scott: So, we've got a brand that we call Sutton Landing, which is a senior rental community, about 600 units and three projects across Long Island.

>>> Michael: I do have to say, both of you have great websites. >>> Scott: Thank you. >>> Michael: Really attractive and gives you a really good approach on that. >>> Scott: Thank you. So, that's our senior product. Then we also opened up a project in Uniondale. >>> Michael: So, is it age restricted? They have to be over 55? >>> Scott: Correct. Yeah. And then in Uniondale, a 200-unit

project, we call the Brix, which is geared towards a younger demographic. And on the senior side, what we're seeing oftentimes is, there's some people coming from the city and the boroughs, but primarily it's people who've sold their homes to people coming from the city and the boroughs, and they're moving in to live with us. >>> Michael: Okay. Let's talk about -- as a banker, where's

your interest today in financing different type of projects in Long Island? >>> Brian: Right. Well, TD is very bullish on, on Long Island, especially in the residential-rental segment and also industrial properties. But we're seeing a lot of activity, both with Scott and Steve, and also, a lot of train, you know -- >>> Michael: Transit oriented developments? >>> Brian: Transit oriented developments. And we're seeing the communities finally after many years, opening up to the rental properties, where for many years it was single home family development. A lot of nimbyism. And now, we're starting to see where, you know, it's still a long process I think for the entitlements on Long Island. I think the average

is seven years -- >>> Michael: But it's, but it's no longer with the frogs. [Brian laughs] Okay? I, I, I remember years ago, I think I had Eddie Blumenfeld on, he was, [imitating Eddie] “those lousy frogs and those -- ” you know -- >>> Steven: Oh, the spotted salamander? [laughing] >>> Scott: But I think what Brian said is an important point. I think we've all seen a real paradigm shift on the island over the last five, seven years, where the communities have become more accepting of rental housing. They recognize that a lot of the rental projects are high quality. Not

necessarily, you know, Section 8 or, or transient, but they're starting to realize that rental can be high quality stuff, like the stuff that Steven and I are building and communities are recognizing that there's value in having that in their community. >>> Michael: And the local politicians are, are trying to be available and helping out on that. >>> Steven: Like less obstructionist. I, I don't know

that anybody's calling for it. But, but like Scott said, it's used to be impossible to get done. Now, now it's possible. >>> Michael: What about repositioning of assets? Okay? Taking different properties and you know, it's even, I mean, the, the Long Beach project has been vacant for 40 years. Okay?

Where are your developments? What's what was on the property before? Were they industrial sites? Were they, you know, they repositioning of the properties? >>> Steven: Pretty much everything we do is a redevelopment of a prior use that has passed its useful lifetime. So, the Selby, was in 90,000 square foot big box retail building that had been vacant for pretty much 20 years. I mean, it had had some short-term tenants, but that big box retail market had left Merrick Avenue and wasn't coming back. So, I think it was a good redevelopment of a, of a use that was no longer serving the community. Our Meadowbrook Pointe development down the block used to be the Roosevelt Raceway racetrack. So there's

very little green land or forested land left to build on in Long Island. >>> Michael: What about, you know, we were talking -- what about Calverton? Is there -- there is land out there. >>> Scott: In Suffolk County, there is still land. There's actually some, some larger land parcels available. Calverton was

a former Navy owned Grumman operated facility that we bought in 2001. It had a 14 industrial buildings and it had about 100 acres of vacant land where we could have built more industrial. But decided to shift gears and we actually built really interesting drug addiction research and rehabilitation facility in partnership with Northwell Health. It's a very unique approach to drug rehabilitation, because of the research component. And really takes a very modern approach where we treat addiction, not like a moral failing, but like a disease. And it's been, been

doing great. We're open almost two years now. >>> Michael: Let's talk about the Bristal. I mean, because you've made a major name in Long Island on the, on the Bristal.

Talk about that. >>> Scott: So, Bristal is our assisted living brand. It's a high end rental model of assisted living. We've got about 30 senior living properties across New York and New Jersey. And we're currently expanding that brand into southeast Florida. But it's really grown into very well known brand

across the region. And we're actively expanding it into Florida, which makes a lot of sense for us. >>> Michael: No question. Let's talk about the Hamptons. I mean,

he has one water, you have a different water. >>> Steven: COVID obviously gave a shot in the arm to the, to the Hamptons. But if you remember, pre-COVID, there had been this boom of spec builders, building single family, make mansions all over the Hamptons, and there was an oversupply issue. And the

market had been dragging for a couple of years. And the COVID happened, suddenly there's this wave of people who either wanted to move out to the Hamptons full time, or wanted to secure their property, so they knew they had an option if they were gonna be going back and forth in the future. And the market has stayed strong even though the pandemic seems to be hopefully ending. And it's been good for us. So, we, we were lucky, in

the sense that we had a project called the Latch, which was the redevelopment of the Village Latch and it was five acres, right in the heart of South Hampton village, about a block's walk to Main Street, and we were just getting ready to bring them to market when COVID hit. And so, it's 20 condominium homes. Three them are in our redevelopment of two historic buildings, the Latch in itself, and then a home called the Terry Cottage. And the rest of them are brand new town homes behind those two historic buildings. And we're all sold out. We sold out this summer. So right now our, our struggle is just getting the homes built, you know, dealing with the supply chain issue. But we're happy to be sold out there. It turned out to be a great project. And we are getting ready to start a 22

single family home project that we're gonna bring to market this summer in West Hampton Beach Village. So that's -- >>> Michael: So, you're gonna go to market this summer. >>> Steven: Yeah. And I shouldn't, I, I shouldn't leave out Oneck Landing. So on the bay in West Hampton Beach, we have a four house subdivision. Three are sold. We've got one house that's under construction now, that will be ready for occupancy this summer. And that's priced at about $6 million on an acre

of land. >>> Michael: Mr. banker, what's your feeling on retail? I mean, people still shopping. >>> Brian: You know, Long Island's a little bit different.

I think it's gotten a bad name, the retail, but if you're a well-positioned, even the outdoor strip centers, or the well positioned malls, they're still pretty much well leased. And when you do see vacancy, there are other tenants that are, if they like the location, location is strong, you're still seeing leasing activity. >>> Steven: They, they financed a 115,000 square foot retail center for us at the foot of our Country Pointe Plainview development. And it's about 80,000 is a ShopRite grocery store. And then the rest is inline retail, restaurants, fitness, et cetera. And we're a hundred percent leased. We focused on, on leasing to businesses that would be a, a nice amenity for our residents at Country Pointe Plainview, but also businesses that were somewhat internet proof.

>>> Michael: Let's talk about Yaphank. I think Allan Rose had Yaphank close to 50 years. Okay? Before he did anything. >>> Steven: The Yaphank project is a master plan development being developed by Allan Rose, by AVR. And it's got a rental component. It's got a big retail component. They just opened this brand new Walmart Supercenter.

>>> Michael: Oh, they opened up the super-- >>> Steven: -- >>> Michael: -- quarter million square foot supercenter. >>> Steven: Yeah. It's, it's massive. They've got a hotel, and then they've got for sale age restricted housing, which is, which is the part of the development that we're building. It's called Country Pointe Meadows at Yaphank. 400 homes for people aged 55 and over. Our sales prices now range from 550

up to 800,000. We have a mix of product. Some are villas, some are town homes. Everything is master bedrooms on the first floor. And I want to say we've got about 120 homes left to

sell. So, Yaphank's a place that a lot of Long Islanders couldn't point to on a map a couple of years ago and -- So starting sales, there was a bit of a risk for us, but it's, it's turned out to be a great community. And in Suffolk County, the real estate taxes for condos are incredibly low. So, you can buy an $800,000 condo in Suffolk County and your taxes will be $8,000 a year. If you buy an $800,000 house in Suffolk County, your taxes are gonna be $25,000 a year. So, for Long Islanders who want to stay on Long Island and don't want to suffer under the high real estate tax burden, buying a condo in Suffolk County makes a lot of sense.

>>> Scott: We just wrapped up project, the Seasons at Elwood, which was also a 55 plus condominium community that was very successful. And we opened up down the street in Dix Hills, the Seasons at Dix Hills. And we're more than halfway sold out in about a year or so. >>> Michael: So, I have a, I have a question and you know, when the first age restricted communities really came into in Long Island, which may be 30 years ago or 35 years ago, what's happening to those properties? I mean, how are they being maintained? I'll give you an example. I think you had the one in West Hampton next to -- you took over -- >>> Scott: We did, we did. Or the way around. We did all the land use and sold it to -- >>> Michael: Right. Okay.

>>> Scott: They then built it and sold it out and did well with it. But those communities are still thriving from what I can -- >>> Michael: Right. It's close to 25 years since that was built over there.

>>> Scott: Yeah. And again, I think they're still doing well. I think we're still somewhat underserved for that product type. I think there's been a shift away from some of the seniors, some more market rate, which is a good thing for the island. We can all be senior, but -- >>> Michael: I think people prefer to have the opportunity to have all different ages over there. I think seniors prefer to see younger people in the neighborhood, so they don't have to worry about just seeing the ambulance come in a property which is 30 years of age. >>> Scott: In Uniondale, we've got two projects side by side. The Brix, which I mentioned

earlier, which is geared towards young people and one of our Sutton Landing communities, which is 55 plus. And they're independent, they have their own clubhouses, but the two do share a lot of commonalities. Interesting. >>> Michael: Where are the opportunities? Okay? You know, there's limited land, as you said out there. There's

governmental controls, which are still out there. But where are the opportunities -- besides everybody loves industrial. But 25 years ago, or 50 years ago, when your father went into this business, industrial -- what a crappy asset. I don't want to, you know, it was something that nobody wanted over there. So

where are the opportunities? I mean, do we see potential life science in Long Island -- in Nassau and Suffolk County? I mean, because life science has a dire need in New York. It's a zero vacancy factor over here. And, and you also have, you know, as you said, leading, you know, you have Northwell Health and you have very -- everybody else opening up over there.

>>> Brian: Well, you had mentioned about adaptive use. And what we're seeing a lot of is, a lot of the big box, a retail that maybe is sitting vacant. I'll give you an example. Sears building on Franklin Avenue and Garden City, there's been a lot of consolidation in healthcare. NYU

is now has a presence in Mineola, joined together with Winthrop. We had a client that purchased that Sears building, and now NYU is leasing that whole building. We're starting to see a lot of that, you know, a lot of that healthcare use commit to these buildings and it's old space that's now being used for medical use. One stop shopping for them. In a spot where typically NYU couldn't find that amount of space, you know, Winthrop is a very -- there's no room to grow it. >>> Michael: Right. It's restricted because of the

location on the Mineola's site. >>> Brian: So, this is a, a great new use of the building that was sitting vacant on Franklin Avenue. >>> Michael: So, with, with regard to that, have you done -- either one of you -- transit oriented developments, out in Long Island? >>> Steven: So, we, our Arverne by the Sea project on the Rockaway peninsula is right at the foot of the beach 67th Street subway stop. And it's a block away from -- a block from the, that subway stop down to the beach. And we've built -- the plan is 2,300 residential units. We've built about 1,700 residential units so far. We built a grocery store. We've

built inline retail, community retail, dry cleaners, banks, restaurants, et cetera. And we've got a charter school under construction right now. So, that's one of -- and that's a New York City sponsored project, through HPD. And I think that's one of their, their -- >>> Michael: Many years -- >>> Steven: It just a quick 20 years. [laughs] >>> Michael: I mean, one generation, that's all it is, over there. But where, where do you see, you know, you have to do business even though you're a conservative bank.

>>> Brian: Right. Well, I mean, we were in the Ronkonkoma hub, which was a, is a Tritech development. That's a five or six phase project. We did phase one. It was, I think almost 500 units and the absorption there and straight through COVID was, was very, very strong. And we were recently taken out of that construction loan, and they're starting in on phase two. We've

seen a lot of development in Farmingdale, around the train station. Mineola, Bayshore, to name a few, all within walking distance or sitting right on the train stations. All highly successful. >>> Scott: We view our Long Beach project as somewhat transit oriented as well. We're so close to the train station. >>> Michael: It is -- >>> Scott: Because it's so close to the train station.

>>> Michael: So close to the train, right? >>> Scott: And it's a short, you know, 45-minute ride to the city. And we actually believe that, we will have large contingent of commuters because it's just a couple blocks walk. >>> Michael: I mean, you know, with Brian bringing out NYU, you know, with the Winthrop situation, with Sinai taking over certain other properties, have you thought of having an, an amenity, like a, an urgent care center or something healthcare oriented in your retail segments of your properties? >>> Scott: We've added telehealth components to our assisted living products. And we've been thinking about doing

it in some of our age restricted communities as well. Some of the clubhouses. So, similar to what you're talking about. Yeah. >>> Michael: And everybody -- what about pickleball? >>> Scott: Pickleball. We got pickleball.

>>> Steven: We've got pickleball. >>> Brian: [laughing] >>> Steven: Gotta have pickle ball. >>> Michael: What? >>> Steven: You gotta have pickleball. >>> Michael: You have to -- I mean, somebody told me about a pickleball court that it was -- it's in Manhattan. I said, where, they have a bubble? No, literally like on 38th street or 37th street. Because you know, everybody wants pickleball.

>>> Steven: Have you played it? It's a lot of fun. >>> Michael: I, I have played it recently. It is a lot of fun over there. What about new players coming into town? You know, you brought up the fact that Southern Land is coming into town. And at one time, you know, you had the national guys,

then they stopped walking away a little bit because they didn't take -- couldn't really feel comfortable dealing with the political. >>> Scott: I think they had a hard time with, like you said, the political environment, navigating through the different towns and municipalities of which we have hundreds. But over time I think that a lot of them have started to figure it out. You know, we're seeing more national competition. --

>>> Michael: Is Toll coming out there? >>> Scott: I don't know if they have an actual project. >>> Steven: They've announced two projects, two single family home projects. So, so Toll was in the market in the ‘80s. They got a project that did not go well and left the market. And now just announced two new projects. One in Dix Hills, one, I believe, in Port Washington, in Nassau County. They're high

sales prices. So, we'll see how they do. >>> Michael: And Southern Lands they they're, they're, they have a major development also. >>> Steven: Southern Lands been working at it for years and years. So, I think they're just getting outta the ground with, with -- >>> Michael: Are you seeing any new -- new players in town entering -- >>> Brian: If anything, it's really been on the industrial side more than anything. We're seeing groups coming in, that

I've heard these land prices of 3 million in acre. The Newsday printing facility in Melville was a, a, a Jersey developer has bought that and they're reconverting that to industrial use. I haven't seen it to, at least TD hasn't, on the residential side. We're very comfortable with our -- call it shallow pool of developers that we know very well, and we know, understand the market out here. >>> Michael: With regard to my

question that I had before on, you know, bioscience and life science. Do you see that? Because -- in certain properties. I mean, the Sears building could have been a good example of that. >>> Steven: I have to tell you, I, I don't know enough about it. And I don't know the tenants. I don't know if there's, there are regulatory issues or, or what. So, I couldn't answer that.

>>> Michael: What about -- you said you did retail. Are, are you planning to do any more retail? >>> Steven: Y-- when it, as part of a mixed-use development, we feel like we've got a good handle on that. But I wouldn't be going out, just looking to buy a strip center today. >>> Scott: We did a lot of retail pre-COVID, primarily because it was a similar site selection criteria to a lot of the senior housing that we were out in the market looking for. So, we did deals with Lifetime Fitness and Stop and Shop and a lot of big box. But, but since COVID, we also haven't been, been as active looking for.

>>> Michael: So, I think in summation, as I said before, at the beginning, my apple is really shiny. It really looks good to be in Long Island. You have to be patient. I think that's an important thing. You have to be patient. And if

you're patient and you run and develop a good property and people are happy with it, you're gonna do well. And I'm happy that you discussed, tell me what's happening. I'd like to thank Brian, Steven and Scott, and I'll see you next week. ♪ [Theme Music] ♪

2022-03-27 20:05

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