Metropolitan Realty Associates and Angelo, Gordon Co. purchase 335,000 s/f for $15 million

Metropolitan Realty Associates (MRA), which has developed a track record for revitalizing distressed and under utilized assets, went under the radar and snagged an office building with a well-known address at a rock bottom price. This is one of the largest sales on Long Island, so far this year. Jericho-based MRA, with its equity partner, New York City-based Angelo, Gordon Co., bought 711 Stewart Ave., a 335,000 s/f building for $15 million, or just $45 a s/f, in an off-market transaction. The building, 71% vacant, was acquired through a dual transaction with Yonkers, N.Y.-based AVR Realty, which had owned the property since 1981, and Guardian Life Insurance, which has held the mortgage since 2002. A CB Richard Ellis team led by Richard Karson and Marty Lomazow negotiated the deal, which closed on May 7. "This property offers an outstanding location with over 17 acres of land, strong market demographics and a tremendous value-added opportunity," said MRA president Joseph Farkas. "Besides being close to the Roosevelt Field Mall, and office buildings at Mitchell Field, it is accessible from every major highway on Long Island and every major bus line in Nassau County stops at its door step," Farkas said. "The timing of this deal is perfect. We believe that the commercial real estate market on Long Island has hit bottom," Farkas said. The deal, which brings MRA's holdings on Long Island to more than 1 million s/f, represents the largest office property transaction in Garden City since 2008, when the 235,000 s/f Atria West was sold for $162 per s/f. Office buildings sold last year in this key office market were valued at $138-$271 per s/f and were substantially smaller in terms of square footage. Adam Rubinstein, MRA's director of acquisitions, said that, "despite the building's low occupancy, the Garden City office market remains strong and the property's location offers several leasing strategies which MRA intends to explore including retail uses...there are very few blocks of space in Nassau County of this size available in the market today." The central Nassau office submarket, which includes Garden City, had an overall vacancy rate of 8.7% at the end of the 2010 first quarter, according to Costar Group. The overall average asking rent in the submarket was $28.27 per s/f. Built in 1947, 711 Stewart Ave. originally was a manufacturing site owned by General Bronze Corp. Grumman Corp. later owned the building, renamed Plant 36, and used it first to manufacture sub-assemblies for Air Force's EF-111 electronic warfare jets and later Grumman Flexible buses. AVR converted the building to its current use in 1984 with a design by architect Peter Elkin that included a 1,800 s/f windowed center atrium. MRA said it intends to invest significant capital in renovations to increase the building's appeal to prospective tenants. Other well-known, prior office tenants were Computer Associates International Inc., now CA Inc., which made its headquarters in the building from 1984 to 1986, and the Depository Trust Company which leased space from 1984 to 2005. Retail space in the property once served Office Depot and a Bennigan's Restaurant. Current tenants include the Sanford Brown Institute, a vocational school, the New York State Department of Education, Nassau Radiology and other medical office tenants. The 2-story building sits on 17.22 acres of land and has parking for 1400 cars. "MRA intends to capitalize on the building's proximity to Roosevelt Field to attract retail tenants, and its location near other medical facilities to attract medical users in addition to traditional office tenancies," Farkas said. The property is just 9 minutes from Winthrop University Hospital in Mineola and eight minutes from Nassau University Medical Center in East Meadow. Previously, MRA successfully converted the former Bristol Myers Squibb headquarters at 1000 Stewart Ave., Garden City, into a now-fully leased mixed-use complex that serves as the headquarters of Lifetime Brands and is known as the Business and Research Center at Garden City. In 2008, Long Island Business News named the Business and Research Center the Top Mixed Use Development on Long Island. MRA also renovated and boosted occupancies at the Jericho Atrium, 500 N. Broadway Jericho, and is getting closer to a 100% occupancy at its Sunrise Business Center in Great River, which at the time of its acquisition was 51% vacant. In 2010, Long Island Business News named the Sunrise Business Center the year's Top Commercial Redevelopment Established in 2001, Jericho, N.Y.-based Metropolitan Realty Associates LLC is a national real estate investment and development firm, owning more than 1 million square feet of office space on Long Island. Metropolitan Realty Associates owns the Business and Research Center at Garden City, in Garden City, NY, the Sunrise Business Center in Great River, N.Y., the Jericho Atrium in Jericho, N.Y., and 711 Stewart Ave., Garden City. It also has important investments in development projects in New York City and many other properties across the country. For more information about Metropolitan Realty Associates visit www.metropolitanra.com.