Raw land now a hot commodity

As Seen in Long Island Business News December 6, 2002 By NICK ANASTASI Staff Writer

RONKONKOMA – It may be hard to find a reasonably priced home on Long Island, but don’t even bother trying to find cheap undeveloped land.

In the past three years, the asking price for a parcel of raw land has doubled or tripled in many areas, as residential and commercial builders scour the region they expect to be fully developed within the next few years.

For example:

· A 5.7-acre parcel on Oser Avenue in the Hauppauge Industrial Park is going for $590,000 an acre, up from $330,000 three years ago.

· Land around Exit 66 of the Long Island Expressway has climbed to $250,000 an acre after selling in the $135,000-$150,000 range only two years ago.

· A 4.6-acre residential parcel north of Montauk Highway in Bridgehampton sold earlier this year for $450,000 an acre, up more than 240 percent from the $185,000 sale price in 1998.

· Land at the Enterprise Park at Calverton is going for $100,000 an acre within the site’s 500-acre industrial core, up from about $60,000 just two years ago.

Jack O’Connor of Grubb & Ellis Realty, who has exclusive leasing rights at EPCAL, predicts the price will soon hit $125,000. And even that number may be low if the Town of Riverhead adopts a proposal to zone more of the 2,900-acre EPCAL site for commercial use. Such action by the town could drive up the price of EPCAL land along Route 25 from about $30,000 an acre to $250,000 or more. That land is now zoned recreational/family entertainment.

Meanwhile, a cluster of industrial parks have experienced a spurt of commercial development near Exit 66 of the LIE.

Raw land in that area within the Town of Brookhaven’s state-designated Empire Zone has become particularly attractive to developers, according to Anthony Aloisio, the town’s director of economic development.

The Oser Avenue site has soared in value due to the scarcity of properties with access to sewers and other amenities modern commercial developers demand, according to Ashlind Properties Richard Cohen, who is marketing the site.

Cohen said it’s very difficult – and expensive – to bring older facilities up to the standards required by modern users, asserting that it makes more sense to build from scratch than redevelop.

Real estate experts and environmentalists agree that the supply of land for development is dwindling quickly. The consensus is that developers are apt to run out of available land by 2010.

Developer Ron Parr said several factors have contributed to the price escalation in Suffolk. He cited the county’s efforts to preserve open space, which has removed a significant portion of developable land from the tax maps. Second, he noted that demand for land has remained strong in both the commercial and residential sectors.

Finally, he said historically low interest rates have added to buying power.

Parr said that in the past several years, land prices for residential have quadrupled, while prices for commercial land have tripled.

“Land prices are as high as they have ever been,” said Cook Pony Farm’s Judi Desiderio, who does not anticipate a decline anytime soon because inventories in all areas are so low.

She noted that the Bridgehampton property that recently sold for $450,000 an acre “is not considered the best area.”

It’s no different in the less tony areas. According to Beechwood Organization principal Michael Dubb, the limited supply of land, coupled with the current demand equals high prices.

“Ten years ago, land costs accounted for 20 percent of a home’s cost,” Dubb said. “Now it can be 50 percent or higher, depending on the land in question.

“It has priced affordable housing right off the Long Island.”

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