Long Island, New York Retail Market

Currently, Long Island’s never been hotter as far as retail is concerned. Though there are fewer opportunities for new retail development, that is by no means slowing down retailers intentions to expand here. Retail occupancy rates in Nassau and Suffolk counties have soared to 97 percent, and demand for quality space along the major retail corridors in both counties has been in high demand for the past few years and shows no signs of slowing down anytime soon. Since Long Island is a mature market where land is scarce, there are few opportunities for new development, the vast majority of new retail projects are actually refurbishments of older centers or the redevelopment of industrial properties.

The revitalization of older well located shopping centers is a common trend on Long Island. The redevelopment of Medford Crossings in Medford is a prime example. The property consisted of a tired center with outdated signage, lighting and landscaping. The anchor tenant, King Kullen, was closing, which gave the owners the impetus to reposistion the property. They put a dramatic new façade  on the center and filled the vacant anchor space with Michaels and Staples. In Carle Place, The Country Glen Shopping Center, which was built in the mid eighties, had begun to lose its luster; thus, the owners refaced and reconfigured the center to attract new tenants. Notable changes to the center include a new 65,000-sqaure-foot Stop & Shop as well as a bi-level Barnes & Noble as the focal point. Other centers in the market that have recently undergone major façade renovations are Philips Plaza in Lynbrook, Oceanside Plaza in Oceanside, Southport Shopping Center in Shirley and Deer Cross Shopping Center in Deer Park.

Even with the shortage of available land, there are still several major developments happening on Long Island. Suffolk County has seen the lion’s share of new development in the retail sector primarily due to the fact that there are more opportunities for development, lower land costs and what appears to be a less cumbersome entitlement process. The Arches at Deer Park, a joint venture between Blumenfeld Development Group, Tanger Outlet Centers and Apollo Real Estate Advisors, is currently in the works. Situated on land that was previously an industrial park, a new 800,000-square-foot “Smart Style Outlet Center” is being constructed.  It will  combine big box retailers, a Regal Cinemas theatre, outlet stores, restaurants and cafés, giving area residents great new options for entertainment, shopping and dining.

In West Hempstead, Basser Kaufman and the Feil Organization have teamed up to raze a group of former industrial buildings to make way for a new 68,000-square-foot Stop & Shop and a free-standing Washington Mutual Bank. Local residents will benefit from the first new grocery store in more than 20 years. R Squared and PJ Ventures have completed Big Box Crossing, a 44-acre project anchored by Wal-Mart, Home Depot and Kohl’s on Crooked Hill Road in Commack. And in Shirley, M. Parisi and Son’s Floyd Harbor Shopping Center is currently under construction at the corner of William Floyd Parkway and Montauk Highway. The 62,000-square-foot shopping center currently has signed leases with Staples, Applebee’s, Cingular Wireless and Starbucks Coffee.

Some of the more active retail developers such as Blumenfeld Development Group, AVR, The Richmond Company, Basser Kaufman, Breslin Realty and the Alrose Group are keeping their eye on the 25A corridor stretch from Port Jefferson to Wading River. There has been a tremendous amount of construction of new single family homes, town houses and apartment communities in this area; therefore, new retail properties are greatly needed in this underserved market.  Developers have been scrambling to secure sites for their tenants and the amount of available properties has been diminishing.

In addition, Long Island, like other parts of the country, has been experiencing remarkable demand for prime corner properties at signalized intersections. Demand has been coming from banks, drug stores, fast food retailers and wireless carriers. Prices for these properties, of which there is very little product, have sky rocketed, often the result of bidding wars. Despite the aformentioned setbacks, some retailers have recently been able to make their first forays into the Long Island market.  Christmas Tree Shops, Sixth Avenue Electronics, Blue Mercury, Five Guys Famous Burgers & Fries, Fatburger, Papyrus, Chipotle, El Pollo Loco, Van Heusen and Massage Envy are all in the process of taking up residency on Long Island.

There have been several new lease transactions completed recently. Best Buy leased the former Waldbaums on Sunrise Highway in Baldwin, and Lowe’s Home Improvement Warehouse leased the former Kmart space in Stony Brook, the former Caldor space in East Patchogue, the former Levitz property in Farmingdale and also signed on to take space at the redevelopment of the Bethpage Market Square in Bethpage. Wal-Mart is opening 200,000 square feet in Breslin Development’s Republic Plaza on Route 110 in Farmingdale, and LA Fitness signed a lease for 60,000 square feet in Blumenfeld Development Group’s redevelopment of the Sports Plus property on Route 347 and New Moriches Road in Lake Grove. Stop & Shop has signed leases for new stores in West Hempstead, Hampton Bays and Riverhead.

— Gregg H. Carlin is the senior vice president of CB Richard Ellis in Woodbury, New York.

©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

Search Property Listings

Requirements for
News Sections

Market Highlights and Snapshots

Editorial Calendar

Today's Real Estate News