• 05.15.24

    LIBN: Despite challenges, retail real estate execs still bullish on Long Island

While expressing disdain for the lengthy approvals process and high cost of doing business here, a panel of retail owners and developers remain generally optimistic about the future of the sector on Long Island. 

That was the takeaway from the discussion at the Long Island Real Estate Group’s “Evolution of Retail” event Tuesday at the Pine Hollow Country Club in East Norwich. 

Moderated by Alison Brennan, CEO of First Development Corporation and a past co-president of LIREG, the panel featured Rebecca Wing, vice president of investments at Regency Centers; David Orwasher, chief development office for Breslin Realty; and Roger Delisle, a principal of Island Associates. 

Wing said Regency, a publicly traded real estate investment trust headquartered in Jacksonville, Fla., is a relative newcomer to Long Island, having acquired its first property here in 2011. The REIT has since grown its Long Island portfolio to 11 retail properties in Nassau and Suffolk counties, and it is currently redeveloping the former Sun Vet Mall in Holbrook into a 168,000-square-foot open-air shopping center to be anchored by Whole Foods. 

“There is very strong demand from grocery chains to break into this market and there is an appetite,” Wing said, adding that “medtail and QSRs are everywhere.” 

Orwasher, whose firm was one of the early pioneers of developing Long Island retail centers, agreed with that sentiment. 

“There is still quite a lot of fervor among food specialty retailers,” he said. “We’re also seeing a lot of growth in the health and wellness space.” 

Wing added that tenants are not as unyielding as they had been about where their stores are situated in Regency’s properties. 

“There’s increasing flexibility in terms of space requirements and layout over the last year or two,” she said. “That’s a bright spot.” 

Though the panelists touted the area’s robust demographics, they also lamented the Island’s molasses-paced approvals process. 

Delisle has developed many retail properties on Long Island over the last couple of decades, and more recently, he has acquired and renovated several grocery-anchored centers in Florida, where he said permitting is a relative breeze. 

“For a project we did in West Islip, the entitlement process has taken a little over five years,” he said. “In Florida, the entitlement process is less than six months.” 

Orwasher said the entitlement process for Breslin Realty’s new multifamily projects in Lynbrook and Baldwin took more than three years. Another obstacle, he said, is the area’s high costs for retail tenants. 

“The tax situation here is borderline extreme,” Orwasher said. “The cost of doing business is getting out of balance for retailers’ margins.” 

However, challenges aside, the panelists were still upbeat about Long Island’s retail landscape, even with the continued rise of online shopping. 

“Retail is essential for socialization,” Delisle said. “You want to be able to walk through a store.” 

Orwasher said though the retail sector is not immune to the migration away from soft goods, experiential retail continues to make gains. 

“There’s still optimism for well-thought-out, well-developed retail centers,” he said. “Entrepreneurism is not dead. Retailing is not dead. It will endure if you’re flexible.” 

David Winzelberg //May 14, 2024

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