Hamptons beaches still provide respite from city humidity, but the area’s ultra high-end retail strips currently look like almost anywhere the wealthy go to shop.
Now, two in-the-know Angelenos have grabbed the majority — 84 percent — of the leasable space in Water Mill with a plan to go against the homogenization.
Joseph Miller and David Fishbein’s Runyon Group, in a joint venture with Adam Frank’s River Oaks Properties, picked up 670 and 760 Montauk Highway, closing in May on the 50,000-square-foot portfolio for $39 million, a record for the area.
They will restore the buildings, bring in tenants both useful and chic and jazz up the outdoor space so shoppers don’t feel like they’re sitting by Route 27. One challenge is congestion: Though the hamlet is geographically central, its traffic causes some to avoid the intersection and shopping center unless they have to pass by.
Runyon’s original retail brokerage business gave its co-founders the talent-spotting chops to pick winners among up-and-coming brands like Aesop, Blue Bottle and Le Labo. They built the retail development Platform, in Los Angeles’ Culver City, then turned to the highest-net-worth suburbs in the U.S., including Santa Barbara County, where in 2022 they bought and fixed up The Post Montecito, which they sold this spring for $56 million, triple what they’d paid.
They plan to hold the Water Mill site.
For Frank, the investment is part of a plan to diversify his El Paso, Texas-based retail business with investments in trophy real estate, mostly in South Florida. He spends most of the summer in Sagaponack.
Fishbein, Miller and Frank told The Real Deal about their Hamptons hopes, which should be reality by summer 2027.
How did this deal come together?
Joseph Miller: We had been watching one of these centers in Water Mill for 10 years and thought it was a great piece of property, but it was a little too small for our program. Then we were sitting down with a friend about a year ago. He’s a lender in New York, and he said it’s coming up for sale and that the sellers had aggregated the buildings on the street and were selling them as a package. Once it was closer to 50,000 square feet, it became very interesting.
Adam Frank: I’d seen the property [760 Montauk Highway] for sale many years ago. It’s an underutilized property that has had a lot of ups and downs. From a real estate perspective, it’s an A+ — you have to drive by it going East and going back to the city. The real question is: Who can bring the right tenants? Then a good friend of mine who worked with Joey on the Montecito project said they’d be working on a project out in the Hamptons. They put together the project and shopped it. In most scenarios they’d go get a whole bunch of investors. But we took a huge chunk and became a majority investor.
It’s a congested area. Does that play to your advantage?
JM: Water MIll is an interesting spot geographically. The location played an enormous role. We think it’s an advantage, because it’s in between everything. Right now, if you are in Southampton, you don’t want to go see your friends in East Hampton, and vice versa. If we make a great spot in the middle, we think it could be compelling.
David Fishbein: One of the properties has a half-acre garden that’s totally exposed to the highway. We’re being thoughtful with how we landscape and buffer. Parts of the town will be connected to Montauk Highway, but there will be places it’ll be protected, where you can escape.
You now own almost all the retail in Water Mill. How do you invent, or reinvent, a village?
JM: We feel a real responsibility that we’re being entrusted with the rehab of an entire town in the Hamptons. We have met people in town where families have lived there for 200 years. It comes with a certain gravity and responsibility.
DF: We’re focused on the daily needs business. A lot of the feedback we have gotten is that places like East Hampton are so corporate and luxe. It’s not comfortable to go with your kids or hang out on a daily basis. So it’s how to create a fine balance where you are coming in for coffee, getting your hair done, doing pilates, but also finding interesting stores you’re not finding elsewhere in the Hamptons.
“From a real estate perspective, it’s an A+ — you have to drive by it going East and going back to the city.”
AF: It’ll cater to the local community as well as everyone who comes out for the summer, with things that are missing from Water Mill. There’s no question of demand or economics. It’s a question of how you can brand and execute it properly.
Can you tell me about cosmetic changes? You told the planning board that some spaces would be smaller.
DF: 100 percent. The former SoulCycle was 4,000 square feet. We want to carve it down to smaller spaces. The more interesting brands and concepts the better. In areas where we have the ability to go smaller, it’s usually our preference.
There was a recent quote in the New York Times calling the Hamptons residential market “a billionaire market with a luxury market attached to it.” How does that play out from a retail perspective?
JM: Sure there are wealthy people, but a lot of billionaires want stuff non-billionaires want. We’re just trying to bring what everyone would like — high-quality stores, restaurants and services and gathering spaces. No matter how much money you have, there’s still the human desire to see your friends. So we’re lucky we don’t have to make that distinction.
Any plans to bring back Penny Candy [the shop at 696 Montauk Highway that closed 20 years ago but still has signage up]?
JM: It’s not part of the portfolio, but we’d love to bring something like that back. Twenty years later, whenever I talk to someone about Water Mill, they mention Penny Candy. It sets the bar for us.
You’ve brought New York brands to L.A. Will there be any sense of the West Coast here?
DF: It’ll be a combination of great local indie operators who exist in the Hamptons and Long Island — or the cool up-and-coming brand from Paris or L.A. We haven’t done leasing yet. We like to be thoughtful about how we merchandise, and we’re taking the first couple months to figure it out.
JM: It would be impossible for us not to bring a little West Coast sensibility though.
What’s the timeline?
JM: This summer will feel mostly like last summer. We just closed, and we’re just trying to run the buildings well and make sure current tenants are successful. We’re working with the Water Mill Citizen Advisory Committee and the town of Southampton on a thoughtful renovation plan. There’s not added square footage, but we will paint and landscape. We want to start construction in the fall and be ready for summer 2027.