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Hauppauge Industrial Building Converted To Mixed-Use Class A Office Tower

Media Coverage
Source: CoStar News
April 4, 2023
Hauppauge Industrial Building Converted To Mixed-Use Class A Office Tower

Office Redevelopment on Long Island Has Millennials in Mind

When developer Aresco Management announced it wanted to turn a single-story industrial property in the New York suburb of Hauppauge on Long Island into a modern-day, mixed-use Class A office tower, the project was embraced by the governing township, which was looking make the broader Long Island Innovation Park at Hauppauge, which the property is part of, more attractive to companies that would employ millennials.

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After seeing the original concept drawings, the township changed the zoning code to permit the structure to be built and allow other developers to construct similar projects. The building, at 410 Motor Parkway, also was the first to take advantage of an overlay district in the innovation park to encourage new development.

But the project didn’t go without challenges. Aresco had to contend with the complexity of incorporating the needs of the varied tenants, especially when it came to the building’s mechanical, engineering and plumbing systems. The development wasn’t immune from the impact of COVID-19, including a government-required shutdown period, followed by staffing difficulties, material shortages and cost increases.

The idea to develop new space in a challenging office market and attract tenants willing to pay above-market rents for a differentiated property paid off and helped 410 Motor Parkway attract tenants during its construction, completed last year.

Interestingly, the pandemic also changed the dynamics of leasing the property’s office space versus the retail space. Initially, Aresco anticipated that the retail space would be easier to lease than the office space, but the opposite was true after COVID led to a labor shortage, with restaurants facing increased food costs. The offices lured corporate tenants looking for open airy spaces and unique amenities that companies hoped could bring employees back to the office.

The development also received tax incentives from the Suffolk County Industrial Development Agency, which saw the project as the beginning of a change for the innovation park to keep it relevant compared to other areas.

The project won a 2023 CoStar Impact Award for the best redevelopment of the year on Long Island as judged by real estate professionals familiar with the market.

About the project: The building features floor heights of 15 to 16 feet with upper floors having large open floor plans and oversize windows to let the natural light in, according to Aresco’s website. It also has an outdoor terrace on the top floor. Office tenants include Hanover Bank while retail tenants include Jersey Mike’s Subs, according to CoStar data.

They made it happen: Jeff Cohen, director of operations at Aresco, and Daniel Rachal, project engineer at McLaren Engineering Group, were key players.