Real estate developers land in Orange County

Real Estate Weekly, March 26, 2008 by John Majeski

With the Port Authority of New York and New Jersey taking control of Stewart International Airport last year and pledging $500 million on upgrades for the Orange County facility, developers are smelling serious opportunity.

That includes Savanna Investment Management, which last week announced it is under contract to purchase 282 acres adjacent to the underused airport. Savanna's vision? One-million s/f of commercial space and a 60-room hotel--a project they have dubbed the Hudson International Business Center.

"It's a great location," Shep Wainwright, one of Savanna's principals, said of the region near the 1-84 and 1-87 corridor.

Savanna is still mulling its building plans, but is considering up to five buildings ranging from 130,000 to 475,000 s/f in size, with a mix of build-to-suit single-tenant and multi-tenant configurations.

With a contract still pending, Wainwright said he could not disclose the financial terms of the sale. What rents might fetch is an unknown at this point.

"Rents are largely dependent on what we build there," he said.

With guidance and funding from the Port Authority, and a multi-million-dollar access road project completed, the Stewart International Airport region is set to grow, said Maureen Halahan, president and CEO of the Orange County Partnership. She sees strong interest from developers.

"None to be compared with in the 6 years I've been at this," she said. "Most developers we're seeing are national developers."

Matrix Development Group recently acquired 69 neighboring acres and plans to construct a 650,000 s/f light-industrial warehouse, while the owners of Hilton Homewood Suites want another hotel and the Orange County Industrial Development Agency--sales and marketing duties are overseen by the Orange County Partnership--is eyeing 158 acres, it has been reported.

The Port Authority in November spent $78.5 million to acquire a 93-acre lease on the airport last year. Pledging to turn Stewart into the region's fourth-largest airport, the agency plans on spending the half a billion dollars over the next 10 years.

Although it has limited service, the number of flights offered at Stewart Airport is reportedly on the rise. As is Orange County's population: It jumped 10 percent between 2000 and 2006.

All the forthcoming improvements bode well for the local real estate industry.

"It bodes well to what's happening in our market," said Dan Clarino, broker/ owner RE/MAX Benchmark Realty Group in Orange County. "There is a buzz because of the airport."