W.P. Carey Sells 111,000-SF LI Property

NEW YORK CITY-Locally based real estate investment banking firm W.P. Carey & Co. LLC, which has been on a buying binge through 2002, has sold off a 111,000-sf Long Island property. An investment partnership led by Hauppauge-based developer the Marcus Organization spent $7.4 million for the 10.5-acre Farmingdale asset, which will be built out and expanded by roughly 4,000 sf and used as an R&D facility for clinical trial firm Icon Laboratories.

Edward Fitzsimons II, a senior managing director at Insignia/ESG’s Long Island office, and Daniel Oliver, an associate, brokered on behalf of the seller. Cushman & Wakefield senior director Ted Stratigos and associate director Jason Forte assisted the buyers, which also include Bellco Health principal David Schuss, in arranging the purchase of 123 Smith St. (Bellco is not involved in the deal.)

According to W.P. Carey vice president Frank Ruimy, who worked on the disposition, the property, formerly a BJ’s Wholesale Club, was under contract to a residential developer but a zoning-change application was denied. Initial plans to redevelop the asset as a multifamily complex were scrapped and an assisted-living concept for the property was also abandoned, Ruimy tells GlobeSt.com. “We couldn’t get the zoning,” Ruimy says. “The town didn’t approve. So, we went back to the market and found another buyer. The situation was even more attractive.”

Ruimy says it is not unusual for W.P. Carey to utilize outside brokers when disposing of smaller, underperforming properties in its portfolio, though with 111,000 sf situated on 10.5 acres, the Farmingdale sale is “one of the biggest” such transactions.

“Every year we establish a list of properties we want to sell on the market,” Ruimy says. Assets that fail to produce revenue over six to 12 months, “that are vacant and have no potential for releasing” generally are put on the block, Ruimy says. However, he adds, the recent sale is somewhat of an anomaly, as W.P. Carey “has so much cash right now” that the company is hanging onto most of its real estate.

Icon Laboratories currently has dual headquarters in Farmingdale, at 260 Smith St., and in Dublin, Ireland’s South County Business Park. According to C&W’s Stratigos, while “the 123 Smith building suits Icon’s needs very well,” a build out of the space is required, which is being handled by Marcus, he tells GlobeSt.com.Turning the former retail space into an office-and-biotech facility will take roughly 10 months, according to Marcus Organization vice president of finance and acquisitions Jonathan Marcus. The final reconstruction of the property will bring the total size up to 115,000 sf. The site can accommodate 200,000 sf, Marcus tells GlobeSt.com.