HICKSVILLE - In May, Apollo Real Estate Advisors paid $30 million for three prime Hicksville buildings.
But except for one small lease, things have been quiet at 50, 100 and 110 Duffy Ave. That silence is about to end.
Leases are currently out for about half of the 425,000-square-foot complex adjacent to one of the Long Island Rail Road's busiest stations. David Bender, an Apollo partner, confirmed discussions were happening, but would not say with whom.
Industry sources, however, report insurance company AIG is looking at 45,000 square feet while Service Employees International Union Local 1199 is eyeing between 50,000 and 60,000 square feet. The union, citing security concerns, didn't comment.
A health club, meanwhile, might take between 40,000 and 50,000 square feet.
"There's a lot of interest," Bender said.
That's undoubtedly a relief for Apollo, which closed on the former home to JPMorgan Chase's credit operations in late May. Chase, which has moved hundreds of local jobs off Long Island in recent years, filled the bulk of the space at the site until Feb 28.
Bender said KeySpan Corporate Services has been in more than 16,000 square feet for several months - using the class B space to provide accounting, tax and other financial services to KeySpan Energy Companies.
Apollo is upgrading the largest of its three buildings, which measures 280,000 square feet, to accommodate multiple tenants. That should be ready at the end of April.
Once that building is about 80 percent filled, Apollo will begin work on its 150,000-square-foot structure at the complex. It is unclear what will become of the 12,000-square-foot building, Bender said.
Local brokers don't think Apollo will have any trouble finding tenants for what's left, though it could take some time.
In the fourth quarter, the 6.5 million-square-foot Eastern Nassau submarket's availability was 15 percent, the Island's highest, compared with 12.6 percent Islandwide, according to CB Richard Ellis statistics. Also, according to CBRE's fourth-quarter numbers, the submarket had filled only 251,000 square feet, the region's smallest amount taken. To compare, Central Nassau had filled 563,000 square feet.
"This much space is going to take a couple of years to be absorbed," said Brian Lee, the Newmark Knight Frank broker who worked on the KeySpan deal.
Still, he added, for tenants needing public transportation, Lee "doesn't know of a better building on Long Island."
On May 25, Apollo Managing Partner Richard Mack said that the Long Island market is "one of the strongest in the country."
He undoubtedly learned that from i.Park, where Apollo transformed a former defense plant into a thriving 1.4 million-square-foot office center. The site grabbed headlines last year when the North Shore-Long Island Jewish Health System took 454,000 square feet in a deal valued at $300 million.
And, earlier this month, Apollo won a $120 million bid to redevelop downtown Riverhead. That project includes residences, a multiscreen theater and a Whole Foods grocery.
The Island is a natural market for Apollo, Bender said, because there's not enough land left to develop and it is hard for competition to make headway.
Plus, he said, "It is close to home."
Source: Long Island Business News