Dan's Papers - October 12, 2007 - Real Estates by Diane Strecker

Commercial real estate on the East End is booming. Not only have many of the existing businesses gone up for sale or been sold, but new commerce is pushing further east. Renovations and tear downs have become common and new construction is underway throughout both forks. With commercial sales that include inns, motels, retail stores, golf courses, vineyards and franchises - East End realtors have the potential to make some serious money. However, the complexities of some of these mega deals require savvy brokers that not only have extensive knowledge in commercial sales but knowledge of commercial sales on the East End where building regulations and restrictions can be stringent. Local expertise is crucial in the sale of an oceanfront site, to bringing a deal to closing, or maintaining its proposed value. Many deals never come to fruition due to restrictions on land use or considerations of the fragile shorelines. Oceanfront hotels on Montauk for example are among the few areas on the East End that allow for such use, only because a structure already exists. There is virtually nowhere left on the East End where one can build commercially on the ocean. Of course that fact drives values to an unbelievable price point. Seasoned area realtors estimate properties such as Gurney's Inn to be worth upwards of $85 million. The Montauk Yacht Club, not on the ocean but on the harbor, set a prime example when it sold for $34 million.

With the growing demand of commercial real estate and so many commercial sites currently on the market, brokers on the East End are once again there to fill a need. The Corcoran Group announced just last week that they will be creating their own commercial real estate division on the East End. From Westhampton to Montauk and as far as Southold on the North Fork, offices will offer specialized services that will include commercial advertising, signage and a new web page distinguishing it from the residential side of the company. The launch will mark the first real estate company to be formally designated to just commercial real estate on the East End. A represesntative for Corcoran said, "As the East End becomes a year round destination, the demands for commercial properties and broker representation in leasing, selling and buying commercial real estate is exponentially increasing."

In East Hampton, the East Hampton Point resort is listed at $55 million. On Shelter Island the historic Chequit and Rams Head Inn are both on the market. Both inns on Shelter Island are historic landmarks. They are listed with Prudential Douglas Elliman in Bridgehampton. On the North Fork a deal was struck this summer to bring in three Starbucks Coffee franchises, in Greenport, Mattituck and Southold. There is talk of a 7-Eleven in Montauk, an idea that would have been unthinkable just a few years ago.

Montauk, the East End town that has seen the most commercial activity this year, has added the Atlantic Terrace to the long list of businesses for sale. The oceanfront resort located at the end of Montauk Village and directly on the oceanfront, recently listed for $25 million. Gosmans Dock and Restaurant, listed for $55 million this spring, is said to have a deal in the works to the tune of $52 million. Deep Hollow Ranch, Ruschmeyers, The Lido, The Ronjo, The Oceanside, The Panoramic View and The Shepherds Neck Inn, as well as a host of various other smaller concerns, have either been placed on the market or been already sold.

The stream of commercial properties filling the market at present seems to be unstoppable and certainly displays the need for specialized service. While other areas of the country worry about values dropping, East End owners spend time speculating what kind of profit their existing shop, motel or restaurant may turn. Those who have owned businesses here for many years are seeing their equity drive into the high millions and many are getting offers they simply can't refuse.