A top executive of Hartz Mountain Industries Inc., the Secaucus, N.J.-based developer, told a meeting of the Commercial Industrial Brokers Society of Long Island (CIBS), the region’s largest commercial broker organization, that once Hartz’s deal for the property closes early next year, the company plans to raze the Melville building that now houses Newsday’s corporate offices and shuttered printing plant.
Gus Milano, Hartz president and COO, speaking at a CIBS panel discussion on the outlook for commercial real estate, said that once the 413,500 s/f building is torn down, the developer, one of the largest private owners of commercial real estate in the U.S. will construct two buildings on the 48.3-acre site at 235 Pinelawn Rd., Melville, probably in 2020.
The plans, he said, likely will include a building of 600,000 s/f and another of 200,000 s/f, both largely for industrial and warehouse-distribution use.
“We see a great opportunity here,” Milano said. “I expect we’re going to do fine” attracting tenants. He did not specify what kind of tenants Hartz will be seeking.
Another panelist, Mario Asaro, president of Melville-based Industry One Realty Corp., said industry executives see a lot of opportunities for Hartz. “We do have a lack of buildings for companies needing about 20,000 s/f of industrial space.”
Milano said Hartz chose to buy the Newsday building, which has housed the Long Island daily newspaper since the late 1970s, because of its close proximity to such major roads as the New Jersey for land, but was unable to find a site for what it was willing to pay. In October, Hartz agreed to pay $54.5 million to the owner of the Newsday site, Chicago-based Tribune Media.
Newsday is said to be considering office-space in the Melville area for its editorial and advertising staff. Printing and distribution have been outsourced.
Among other panelists who addressed the gathering was Michael Mattone, executive vice-president of the College Point-based Mattone Group, who said the retail end of the real estate business “is still generally soft.” He said activity has been more brisk in some downtowns, such as Westbury and Bay Shore.
Additionally, Mattone said retail landlords now are attracting medical group offices and physical fitness centers.
Melissa Naeder, a retail specialist in the Melville office of Cushman & Wakefield, said her chief concern was “becoming more creative” in attracting “the next generation” of retailers, such as specialty shops and holiday stores.“My job is to fill space,” Naeder said. “I need to get creative here.”
Thomas McCambridge, vice president of the Garden City-based Albanese Organization, said he’s seen reduced activity in the office sector. “We’ve had good occupancy over the years,” he said. But, he noted that bank consolidation on Long Island has reduced demand in the office sector. Albanese’s holdings are primarily on Franklin Avenue in Garden City, where it has eight buildings.
David Pennetta, an executive director at Cushman & Wakefield’s Melville office warned that it is time to “talk about the next downturn” in business, which he said could be precipitated by a crisis in the student loan market. Unpaid student loans could create a new tsunami in the years ahead, he said, “It’s hard to predict when that will become as major problem.We just need to watch it and have more discussions like this.”
The panel was moderated by Farrell Fritz Partner Peter Curry, CIBS’ general counsel.