The State of the Real Estate Industry on Long Island: Co-operation Key to Future Development
LIBN: State of the LI Real Estate Event
Developers, townships, and local governments on Long Island are working closer together than ever to create transit-oriented residential areas (transit-oriented districts or TODs) that will attract and keep Long Island’s younger generation.
That was the message relayed on Tuesday, May 10, 2016, at the State of the Long Island Real Estate Industry event sponsored by the Long Island Business News and Berdon LLP, accountants and advisors to some of the nation’s oldest and largest owners and developers.
Panelists participating in the event included:
- James J. Coughlan, Principal & Co-Founder, TRITEC Real Estate Company, Inc.;
- David Pennetta, Executive Director, Cushman & Wakefield, Inc.;
- Jeffrey L. Pliskin, President & CEO, Pliskin Realty & Development, Inc.; and
- Matthew B. Whalen, Senior Vice president of Development, AvalonBay Communities.
In a wide-ranging discussion moderated by Berdon’s Maury Golbert, Chair of Berdon’s Real Estate Services, the panelists made numerous observations regarding current and future plans for Long Island development. As Berdon’s Golbert said, “Towns not getting it right are having trouble.”
Highlights of the panelists’ comments included:
James Coughlan, TRITEC Real Estate:
- There has been a “seismic shift” in the way people view where they live and work; all generations are looking for more “experiential space.”
- Long Islanders are flocking to “cool places” to live and work though these markets, such as Portland, Hoboken, and even Bethesda, MD, are not inexpensive markets.
- Transit-oriented developments, TODs, offer “real hope” for Long Island, where individuals want the experience of living downtown and walking for conveniences.
- Suburban office buildings are “zombies,” because companies are placing more people in less space and allowing flexible working arrangements (more employees working all or part-time from their home).
David Pennetta, Cushman & Wakefield:
- “If we don’t have young people here, the large businesses that I deal with will leave.”
- There has been a change in the way townships work with developers, creating “performance-based zoning” which lets the free market dictate development.
- Melville and Huntington provide good examples of Employment-oriented Developments (EODs), which focus on more than just transit in order to provide a vibrant urban experience for employees and employers.
- School districts, retail outlets, and even banks are shrinking in size, creating additional available brick and mortar spaces on the Island.
- No one should forget the rule of Real Estate 101: Employers will go where the employees are.
Jeffrey Pliskin, Pliskin Realty & Development:
- The demise of Waldbaum’s, Pathmark, Fairway and Sports Authority has created large spaces in need of new tenants in Long Island.
- Service-based businesses, such as spas, restaurants, and gyms are becoming more prevalent on the Island.
- The increase of service based businesses has resulted in issues with parking, especially in Nassau County. Additionally, many businesses have been confronted with sewage issues in Suffolk County, which often requires the purchase of water rights to ensure adequate water and sewage treatment.
Matthew Whalen, Avalon Bay:
- Avalon’s community of 349 units in Rockville Center took 10 years to complete but leased faster than any other Avalon building in the nation.
- High returns combined with high costs are pushing New York City developers into multi-family development on Long Island.
- Pockets on Long Island where people want to live must offer access to transit as well as a fun environment.
- Those 25- to 35- years old will get pushed out of Manhattan by high costs: “We on Long Island have the opportunity to grab some of them.”
- Creation of a third track on the Long Island Railroad will ease crowded conditions and increase access.
In a 1:1 conversation following the dynamic panel discussion, Berdon’s Real Estate Partner, Meyer Mintz, and Deputy County Executive of Suffolk County, Joanne Minieri, offered these insights:
- “We need to make doing business easier here. We need to be more efficient … and more responsive.”
- To this end, Suffolk County government has created a number of programs, including Connect Long Island, a regional transportation plan to coordinate land use, transit-oriented development and rapid transit options; JumpStart to help municipalities with infrastructure; Downtown Revitalization; Work Force Housing Fund; Regional Planning Councils; and five Industrial Development Agencies (IDAs).
- Good communication and good coordination are critical to successful development projects, because delays are costly.
- Improved transit on Long Island is critical, with improved north/south connections (Connect Long Island) as well as connections between businesses, the beaches, golf, wineries, and other Long Island natural assets.
“Co-operation can make or break something,” Minieri said, “so we must transform the way we do business on Long Island. With great planning and fabulous design, it will happen.”
Although the current market is a bit soft, specifically in the retail segment, it is evident that there is a significant amount of opportunity to enhance the real estate landscape on the Island. The continued development of “live, work, play” communities combined with new governmental initiatives has resulted in local real estate executives being optimistic that Long Island is on the right path to become a desirable destination for businesses and their employees.
LIBN "State of the Real Estate Industry" Special Event Section
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