Investors Seize Opportunities in a Surging Long Island Real Estate Market
Marcus & Millichap’s 2021 sales volume in Long Island has increased 780% over the preceding 12-month period. This type of increase is especially notable during what is still a challenging time for many. So who is buying and selling in Long Island and how has Marcus & Millichap been able to increase its market share?
Michael Tuccillo, a Long Island native and investment sales specialist at Marcus & Millichap’s Manhattan office, spoke to The Real Deal along with his colleague Susan Bands, Regional Manager of Marcus & Millichap’s Manhattan, Westchester, and New Haven offices, about the robust real estate market on Long Island and factors most likely to influence investment opportunities in 2022.
Perfect opportunity for the “never sell” crowd
“Generally, Long Island has demonstrated relatively low sales velocity and a preponderance of generational owners who “never sell,” said Tuccillo. However, an inflow of residents from Metro-NY during the pandemic has spurred the Long Island economy, resulting in increased demand and sales prices throughout 2021.” That, combined with overall challenges and management headaches caused by the pandemic, incentivized certain generational owners to seize the opportunity to sell.
In many instances, Marcus & Millichap’s local market specialization and national platform helped draw new buyers from out of state, who pay higher prices. In these cases, the team’s local expertise was essential in helping buyers navigate the administrative filings and processes. “Long Island is relatively small but exceptionally diverse in terms of demographics and trends; it requires an expert who really understands the nuances of Nassau and Suffolk Counties and the towns and villages within,” said Bands, who is also native to the Island.
Conversely, many Long Island owners leveraged the opportunity to move their capital out of state. “We are seeing a tremendous migration of New York capital to the Southeast and Texas”, said Bands, “it’s going both ways.”
Where Marcus & Millichap sees new growth on the horizon
According to Tuccillo, “2022 should be another strong year for motivated sellers and buyers who want to jump into the market looking for multi-family, industrial, retail, office, and self-storage opportunities.
Knowing the demographic shifts and emerging businesses on Long Island, the team can identify opportunities and provide clients with information to help them make informed decisions ahead of buying or selling across all asset types.
“With self-storage, in particular, the land in and around Metro-NY is too expensive. Developers and builders are buying land in Long Island to develop into storage units and reselling at a great price. Industrial investors notice that properties in Long Island are price-competitive, and the central island offers a timely opportunity,” expresses Tuccillo. “In central Long Island, investors and buyers can plan out new opportunities that take advantage of extensive transportation networks with close proximity to major highways and railroads.”
Outside of commercial developments, multi-family investments are also on the rise due to the surge in business expansion on Long Island. “Many longtime property owners sold holdings and left the area, which opened up opportunities to develop brand new apartment complexes or renovate existing ones,” Tuccillo explains. “This helps attract tenants with families looking for neighborhoods where they can have that live, work and play lifestyle.”
- Many developers have embraced the live/work/play mantra, developing various communities across Long Island. Suffolk County has seen increased multi-family activity as people chase cheaper property taxes. In turn, this has shortened the commute to 30–40 minutes as the commercial center has shifted away from one that was traditionally Nassau County focused.
- Those eager to make a move will be able to find properties with great amenities near any Long Island downtown – jobs, hospitals, schools, colleges, and local businesses, help to create a high demand for housing and retail. Where there is demand, commercial real estate investors compete for success. In Nassau County, despite a higher tax rate than Suffolk County, the real estate competition has caused investors to pay a higher price for commercial real estate.
With such a surge and notable shift of residents and tenants moving east in the Long Island market, Marcus & Millichap continues to see growth in activity for all asset types in key locations and growing neighborhoods. Investors can confidently work in tandem with Marcus & Millichap to build a competitive advantage that results in major new opportunities.
“Marcus & Millichap is a national firm with a collaborative culture. Our market presence, combined with expertise in completing transactions in Long Island, enables us to maximize value for owners and investors and achieve unprecedented prices. This enables us to draw upon a large pool of out-of-state buyers willing to pay a premium for these rare Long Island opportunities,” says Bands.
Interested in investing in the Long Island market? Contact Marcus & Millichap today.