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December 2014 Vol. 6 Issue 5
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Dear Friends,
I believe that one of the reasons that we find the holiday season is so enjoyable is that our emphasis is where it should always be: Helping and giving to others, and sharing love. Being the optimist that I am, I like to concentrate on all the wonderful blessings that are ours. Yes, we have run-away deficits, terrorists, and other atrocities throughout the world, and I don't mean to diminish our action on those fronts. But we also have many blessings, as well as millions of not-for-profit organizations in the world, all of which were created to help others. And many millions of us volunteer time to support others in some way, and if we were able to total this time, it would be staggering. Most of this activity never makes the headlines.
I believe that if we individually reach out to others, and just make the world a little better place with our daily actions, the larger problems will begin to solve themselves. Let's start with those around us. And more importantly, let's continue that spirit all throughout the new year!
Wishing you and your family a beautiful holiday, full of love and caring, and a 2015 full of peace and happiness.
"Oh the possibilities!"
David G. Hunt
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Industrial Office Conversions
by David G. Hunt
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Q: We are looking for a small office building to buy for our professional practice. Our broker is suggesting that we buy an industrial building and convert it to an office building. Is this practical?
A: As property values have risen on Long Island, particularly in Nassau County, the highest and best use of properties has often changed. So a well-placed industrial building may indeed be a candidate for conversion. And it may also be a pitfall for the unwary! So let's take a look at some of the factors involved in a conversion and how practical it may be.
One of the first concerns that I have is parking. Many older industrial buildings were legally built with a parking ratio of "two to one." This means that there were two parking spaces allocated for every 1,000 square feet of building area. This would be woefully inadequate for any sort of office use, and would not meet any modern building code for office use. An office building is often required to have a parking ratio of five to one, and sometimes more. So in most jurisdictions, a 10,000 square foot office building would need at least 50 parking spaces. So the office conversion candidate probably needs an oversize plot, or an adjoining plot that may be acquired. Or, the economics may actually justify demolishing part of the existing structure to create additional parking.
Zoning in many areas actually allows office buildings to be built in an industrial zone, "as of right", meaning that a zoning variance will not be required for a conversion. But this is not necessarily so. The actual conversion will require building plans, and probably a new site plan, both of which will need to be approved by the local jurisdiction. But this is relatively minor compared to the time and expense of a change of zoning, or obtaining a special use permit.
The surrounding properties are also a consideration. I would have little concern about an office conversion if the property were located in well-maintained industrial and research park. But the resale value of your office conversion may be a problem if it is located next to heavy industrial manufacturing or a scrap yard!
Know your construction costs before committing to the project! These costs are highly dependent on the actual structure you are considering, so avoid averages or "ball-park" conversion estimates. You cannot afford to negotiate on the existing building without knowing your total cost, which includes acquisition, conversion, and soft costs.
Two other quick caveats... Click here for full article
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Property Highlight
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Financing File
| Current Market Rates and Programs for the Long Island Commercial Marketplace
The SBA 504 loan program offers long term (10 or 20 years) fixed rate subordinate mortgage financing for the purchase and renovations of existing buildings or new buildings and equipment. Loans are up to 40% of the project cost..... (MORE) |
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COMPARABLE SALES IN THE LAST 12 MONTHS
City | Address | Property Type | Size SF | Office SF | Acres Total | Sold Price/SF | Sold Date |
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Plainview | 11 Skyline Drive | Industrial
| 47,421 | 2,344 | 1.82 | $54.83 |
11/14/2014
| Lynbrook |
733 Sunrise Highway
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Office
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18,000
| 12,000 |
1.91
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$311.11
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11/6/2014
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Hempstead
| 298 Fulton Avenue | Office | 10,800 |
| 0.12 | $97.22 |
10/24/2014
| Freeport | 178 Hanse Avenue | Industrial | 33,432 |
| 1.62 | $65.81
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10/22/2014
| East Patchogue | 240 Hedges Avenue | Industrial | 10,677 |
| 0.88 | $44.49 |
10/20/2014
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Melville
| 175 Broadhollow Road | Office/Investment | 183,218 |
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7.2
| $72.32 |
10/17/2014
| | | | | | | | | For more Recent Sales, click here |
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