Long Island Real Estate Briefs; May 4, 2007

Long Island Business News, May 4, 2007 by Dawn Wotapka Hardesty

Fairfield knows what it can (and can't) do in Melville

On Long Island, the Fairfield name is practically synonymous with residences, and rightly so - the 33-year-old family-run company has about 5,000 apartments here. But Fairfield Properties also owns 400,000 square feet of office space.

Nearly 20 percent of that total comes from a colonial building at 150 Broadhollow Road in Melville, a 75,000-square-foot Class B building Fairfield purchased about a year ago. It's an enviable location between the Long Island Expressway and the Northern State, but the circa 1960s design just screams, well, colonial.

That's why Fairfield decided to bring it "from the 1960s to the 21st century," according to David Berger, the Commack company's director of leasing. The building is undergoing a $1.5 million renovation that includes a new roof, landscaping, parking lot work, a retaining wall, rehabbed elevators and hallways and eight new "designer bathrooms," Berger said.

But the biggest changes have come in the tenant roster. When Fairfield paid an undisclosed price for the site, it was 20 percent vacant and had below-market rental rates, and about 75 percent of the tenants were on month-to-month leases, ensuring little security.

Today, several tenants have long-term deals - an average length of five years - for 18,500 square feet. More than 15 tenants have signed 23,000 square feet worth of new deals. With 5,000 square feet, the biggest is Gersh Academy, which caters to educating those with neurobiological disorders.

The average lease size, however, is about 1,500 square feet, and the tenants - largely smaller financial firms, accountants and doctors - aren't attracted to the glitz and glamour accompanying trophy addresses. That's because the building, located at the tip of the Island's office spine, doesn't have a cafeteria or other Class A amenities.

Berger makes no apologies for that. The site is "not big enough to offer those kinds of things," he said. "We're not looking to attract the Fortune 500 company. That's not our niche."

In the western Suffolk market, 13.9 percent of Class B space is up for grabs, almost matching the Islandwide rate, according to CB Richard Ellis' first-quarter statistics. The submarket's asking rent is $23.96 per square foot, compared with $31.20 for Class A. Nassau County, which is typically more desirable and expensive because it is closer to Manhattan, has a vacancy rate of 12.8 percent, compared with 15.4 in Suffolk's Class B digs.

Trio of Prudential deals

Prudential CRES Commercial Real Estate's Daniel Hurney recently completed the $699,000 sale of two Port Jefferson retail buildings - 1,500 square feet at 517 Route 112 and 2,000-square-feet at nearby 519 Route 112 - to Jefferson LLC. The properties are being renovated.

In another Prudential CRES deal on Route 112 in Coram, Silo, a human services agency relocating from Farmingville, leased 10,000 square feet of office space. Kareem "Jack" Jawdat, a senior real estate adviser, represented the tenant and the landlord, a private investor.

But don't go thinking Prudential CRES only works on Route 112. On Main Street in Holbrook, BSS 2 Corp. took 3,375 square feet of retail space.

Jawdat worked for both sides. ABEM Properties is the landlord.

Zere's lucky lot

Michelle Zere says she almost didn't take a Bay Shore listing because it is on a side street, but now she's glad she did.

Zere, with Zere Real Estate Services, helped sell an 18,000- square-foot office building that will be converted into a medical center that will include a state-of-the-art radiology center with MRI technology.

Zere said she highlighted the area's accessibility to public transportation - including bus and rail access - and the building's large parking lot. Gene Murphy, Islip's planning commissioner, suggested an architectural reconfiguring of the parking lot for a medical building, a "linchpin" in sealing the deal, Zere said.

Zere represented the seller, Joseph Maneri, and Steve D'Orazio of Sutton & Edwards Inc./TCN Worldwide worked for the buyer, who was not disclosed.

The price was not disclosed.