Andrew Doud 0:08

It's Thursday afternoon, everyone. I'm Andrew Dow with Sons and Associates, and it is time for another Happening in the Hamptons podcast, our weekly breakdown of the Hamptons Market new listings, an event on the East End, and we have come to Labor Day weekend. Labor Day weekend, here it is. The end of the unofficial end to summer. I actually think September is one of the nicest months out here.

Dave Rattiner 0:27

No doubt about that.

Andrew Doud 0:28

But uh but yeah, nonetheless, it is Labor Day weekend. And we are joined today by Steve Glick, as always, Dave Retiner, and today, Lee Minatry, the commercial real estate expert here at Saunders. Lee, over 30 years experience? Yes, sir. Selling commercial real estate. So he knows a thing or two. And Steve has some interesting numbers related to commercial real estate. So Lee, before we ask you a couple questions, I want to toss it over to Steve.

Steve Glick 0:54

Yeah, Lee, it's good to have you, the commercial real estate expert. So looking at the numbers of the data from you know, we're looking at commercial real estate. The first half of 2021 versus 2020, sales transactions in the commercial real estate sector was up 88%. 88% more uh commercial real estate went into uh sold the first half of 2021. The dollar volume was up 41 percent. And if you look at just the second quarter numbers alone, the second quarters there were a hundred uh thirteen sales transactions in commercial real estate, which is up a hundred and sixty percent from the second quarter of last year. So obviously there's a lot of activity in that commercial market. You know, it's like going crazy this this year. And what it's interesting because I mean we've talked for the last I thought commercial was like gonna go down because coronavirus.

Andrew Doud 1:49

So what what are you saying? Why why is this happening this way? Why are these numbers the way they are?

Dave Rattiner 1:53

Well it's illuminate us.

Lee Minetree 1:55

It looked like they were gonna go down in the beginning. Were you scared in the beginning? Sure, you know, I I everybody was, you know. You know, I pulled back in the stock market, took my you know, some money out, and thought, you know, it was gonna, you know, everybody was gonna, we were gonna have no business, you know, we were gonna be slow and the stock market was gonna be down, and you know, it was gonna be a problem everywhere. But lo and behold, I mean, in the beginning I had a uh a restaurant that was trying to sell their lease, and uh it was uh Wolfer in Sag Harbor. Sag Harbor is probably the hottest town out here. We had it listed for 500 once COVID hit. They wanted out and we sold it for much, much less than that. Um was thinking, you know, restaurants were gonna have a terrible year as it turned out. It was a boom year for restaurants for a number of reasons, although their capacity might have been reduced. They did allow a lot of outdoor seating that it would have uh never been allowed. There was a big uptick in uh takeout, and I think the biggest factor was the amount of people that were out here in the off season, which is normally uh very long and very slow. You know, in the past years, normally everybody made their money in the summer and then just kind of survived in the winter.

Steve Glick 3:19

Well, we're seeing, yeah, we're seeing businesses and restaurants remain open all year round. All year round, and which was great for someone that works out here year-round to be able to go to these restaurants. Well, a number of people.

Dave Rattiner 3:28

To the point, though, a lot of restaurants are having a hard time finding workers. My my wife works for the Nick and Tony.

Lee Minetree 3:34

No, well, that's that's that's an issue now here and everywhere. I mean, and that has caused some restaurants to, you know, have to close down a day or two because they don't have the staff or not, you know, have as many tables as they normally do.

Steve Glick 3:48

So what businesses were you seeing coming out here? Like who's who's taking why is the commercial real estate up 88%? Who's who's taking these?

Lee Minetree 3:56

Well, I think when once a lot of people came out here, you know, they they look to invest in in where they're living so they can be near their assets. Um a lot of them will probably, you know, with the stock market and interest rates being so low, looking for a better return on investment, and and real estate is a good place to do that.

Steve Glick 4:17

Um But what was the industry?

Lee Minetree 4:19

Was it a lot of medical coming out here? Well, there were there were a lot of doctors in the beginning that, you know, looking for short-term rentals. You had uh dentists, um dermatologists. Lots of doctors say my people are out here now. I want an office.

unknown 4:36

Right.

Steve Glick 4:36

So they they were leaving the city and opening up a satellite office here.

Lee Minetree 4:39

They wanted to open up a satellite office here. We there there were some longer-term plays that we were I didn't think of that one.

Dave Rattiner 4:46

They they had to set up shop. They customers.

Lee Minetree 4:53

And a number of them uh and a number actually ended up buying uh uh offices. Right. So there was a big demand for medical offices. There were a lot of guys who were looking to just rent a small office and get out of the house, you know, something like that. Um, we did a rental to a big hedge fund in in Southampton, a 4,000 square foot office on a longer-term lease. A lot of them were looking for shorter-term leases. What about retail? Like retail going crazy. Retail's going crazy. Yeah, very with everybody out here, everybody wants to be out here. There were the normal people looking for pop-ups, you know, probably as many, if not more, than ever. There weren't many pop-ups available. Um, where normally after the end of 2020, after Labor Day, normally a lot of people vacate those rentals, and oftentimes landlords would be stuck with a dead period, say, between Labor Day and when they can rent for the next season. You know, somebody who wants to get in for the next season, they're not gonna go in in September. They're gonna go in in March and April. So often landlords had that period where they weren't making any money, they weren't getting rent.

Steve Glick 6:08

Are there still good opportunities now for someone to come in?

Lee Minetree 6:12

The problem is that a lot of people extended their leases at the end of the summer instead of vacating because they saw everybody was gonna be out here and they continued, so business became good year-round, and you've probably heard the stories, a number of landlords, since they saw people were making money, tried to jack the rent up. So um that's the thing.

Dave Rattiner 6:36

I mean, if you if you don't have a if you're running a restaurant or whatever, and you don't have a good symbiotic relationship with the landlord, it's like they well, you normally have a longer-term lease.

Lee Minetree 6:47

Uh I mean the way the restaurant leases work around here, there's so few spaces, you don't just go in and get in a restaurant. You either have to pay key money to the owner of several hundred thousand dollars, which is the basically a right to lease the property, or you buy somebody out of their lease. So when you're doing those sorts of things, you're normally making a long-term commitment.

Dave Rattiner 7:10

So if you're a restaurant owner and you're running like like you're running, you want to sell your restaurant today and you don't own the building. You can sell your way with real money, you can sell your business.

Lee Minetree 7:21

I mean, depending on the location and the uh and the business. Um John Papas is on the market right now. That's a million three, which is a big number.

Dave Rattiner 7:33

Just for the business.

Lee Minetree 7:34

Business equipment and the lease. You know, most people though are gonna want to change the names themselves. They're basically looking for the lease and and the equipment.

Andrew Doud 7:44

So people are looking long term. I mean, they're not seeing this uh Well, they're looking long term and short term.

Lee Minetree 7:49

A lot of the rental action right at the beginning of COVID was was shorter term. But now we did uh put Cornell Weil Medical in imaging in the uh building in uh Southampton on a long-term lease. They built it out previous to that. NYU Medical had leased the and they finally opened up this year, but that lease has been in place before COVID. So um a lot of people ended up coming out looking for uh net lease properties, which are basically income-producing properties. So a number of those sold out here, those are the inventory there is kind of low right now. Uh typically those are driven by 1031 exchanges, which you know they're trying to defer taxes. They've sold another asset and they're looking to uh uh buy another asset to defer the taxes.

Steve Glick 8:43

So Lee, take out your crystal ball and tell us the future of commercial real estate in the Hamptons. Where do you think it's where do you think it's going? What do you what's gonna happen out here?

Lee Minetree 8:52

Well, it all a lot depends on what happens with COVID. You know, I mean, the way it looks right now, I think we're gonna have another busy off season. Right. I do too. That's fun.

Andrew Doud 9:02

I mean, I love when everything's open. We had talked a lot too with with how hot the the market had been that people were making this their their primary home.

Dave Rattiner 9:11

So, you know, do you think that makes sense that they're gonna make it their primary business area too? Well, exactly.

Andrew Doud 9:16

And and as you said, you know, businesses, doctors, right? They're they're kind of following their client base out to where they're living now. It's like it doesn't, you know, if you have a lot of people that were in the city, now they're all out here.

Lee Minetree 9:26

Well, with the the office concept changing where you can work remotely, and obviously that works now. I think a lot of families are figuring out hey, we can live out here full-time, and whoever the husband or wife can go into the city just two or three times a week instead of being there full-time.

Dave Rattiner 9:44

But you said something interesting earlier. You were like you sold a hedge uh building to a hedge fund. Well, they rent a long-term release.

Lee Minetree 9:52

They they have homes out here and they you know, do you think it's COVID?

Dave Rattiner 9:56

Do you think the hedge funds are are are gonna start creeping out here that that's gonna be hard to hard to say.

Steve Glick 10:03

Do you think it's only COVID? You think if if COVID goes away, then everyone's just gonna flood back the city? You don't think that people are enjoying working from home in these positions?

Lee Minetree 10:11

No, I think they will. I think they will. It's just a question of how much it is. I mean, last January, you had a tough time getting a reservation on a Saturday night anywhere. Nowhere in the past. You can go wherever you want. Yes, you know, and so I mean, it's just it's just crazy. But the market, you know, there's some other things going on. I mean, Sag Harbor has been very hot with what's going on with Bay Street there. Yeah. I had a building that came on the market and we sold it in two weeks. We had multiple bids. Wow. Um, you know, it's just stuff like this is is, you know. I mean, the the commercial is following the residential in that, you know, it's crazy busy. You know, and they're and we're getting, you know, inventory's getting depleted.

Dave Rattiner 11:02

There's a lot of real estate agents in the Haftics, right? There's well, there's over a thousand. But I can only think of like five commercial real estate agents. Like, how did you find that niche? Like, how did you fall into it?

Lee Minetree 11:15

Because it's just 30 years, and I mean, I uh I was formerly in the newspaper business, so I know and I grew up here, so I know all the business people. I worked at the East Hampton Star selling advertising for 10 years. At the time I was selling real estate as well and managing the advertising for a real estate company. I was trying to buy my land, so it was like uh, how many jobs you have, Mom? I had uh I was selling advertising at the star, I was managing the advertising for a company, I was selling real estate, and I was bartending catering for loaves and fishes. So trying to buy a piece of land.

SPEAKER_04 12:04

Right.

Lee Minetree 12:04

So uh I worked for the star for 10 years. I I saw an opportunity, I started another newspaper, The Independent. So I ran that newspaper for about uh 13 or 14 years before I uh left and sold real estate full time.

Steve Glick 12:23

And and why commercial? You just knew all these. Well, I became the relationship with all the business people.

Lee Minetree 12:27

You know, I know the business people, but I did a big commercial deal. I sold watermill lumber for a big number and became known as the commercial guy. Um, I'd always at that point. So, I mean, I I've sold some big houses and stuff too, but for whatever reason you get you sold my dad's building. Yes, yes.

SPEAKER_04 12:47

I sold my dad's building.

Lee Minetree 12:49

So um, you know, I was a director of Southampton Chamber of Commerce for a couple of years. So I know the business community, and you know, that's that's you're you're the go-to guy for commercial real estate, hands down.

Andrew Doud 13:01

So how does this last year then compare to what you've seen over time? I mean, this has got to be.

Lee Minetree 13:05

It's been crazy. It will probably be, it'll be close, but I you know, because I've had a couple things fall through, but it it will probably be my busiest year ever. It's crazy. Good for you. So, but normally commercial um inventory is driven by you know partner breakups, uh deaths, divorces, um, you know, um, if you have a successful business going in Antics, why would you ever sell it? Yeah, I mean you have somebody to pass it on too, but there's always things happening. But it it's interesting commercial industrial property is very, very difficult to come by now. There is one piece of raw land on this side of the canal with um the town cracking down on people parking commercial vehicles in in their you know driveways and stuff. There's a lot of people looking for commercial property, and there's there's not very much of it. All the comprehensive plans are really geared toward um residential property. So um, you know, it's interesting there.

Dave Rattiner 14:18

It's an uphill battle, you know, with you know you doing a business out here.

Lee Minetree 14:24

Yeah, but as you can see, there's a lot of money to be made. Just look at the trade parade coming out every day.

Andrew Doud 14:30

But that's I mean, to your point though, I mean, look, the the year-round sense that you get from being out here, uh, that more people are making this a year-round home is certainly driving if you if you hear me, right, the commercial the commercial sense.

Dave Rattiner 14:42

Only benefits everyone. Right.

Andrew Doud 14:45

Um, so let's talk about what's happening out here. It is, as we said, Labor Day. Yeah, this is the one weekend.

Dave Rattiner 14:52

All right, so my top three picks, well, good luck with getting a reservation. Uh, I don't know what to tell you about that, but if you haven't made your reservation for dinner, just uh picnic on the beach is always a good idea, something like that. Um, you don't have to pay for those reservations. But in terms of events, um, this Sunday is the Hampton Classic Grand Prix, which is the ultimate place to be. Um, you got the big tent and all the food, and it's uh you know everyone piles in there. Um I've been to that many times. Can't recommend it enough. The Hampton Classic Grand Prix is the ultimate symbol of the end of summer. It's like the one the one symbol of like, okay, it's Labor Day weekend, it's time to go.

Lee Minetree 15:34

I thought Tumbleweek Tuesday was. I don't know if we're gonna have it anymore. Yeah, now it's like party time Tuesday.

Dave Rattiner 15:44

So, but um, alright, so that so that's the Hampton Classic then in West Hampton. The West Hampton Beach Performing Arts Center is presenting that Motown band, and from what I listened to, they're a pretty friggin' good band. Um so that is this Saturday from 8 p.m. to 10 p.m. If you find yourself in West Hampton, which is such a street. I mean, I can't believe what they did with the main street there. Yeah, West Hampton is a great downtown. And then you have the Hamptons Fine Art Fair in Southampton. Um that is going all weekend long. That's that guy, Rick Friedman. He's been doing that forever with the big, you know, art like 70, I think it's like 70 national and international galleries are there, all the local galleries are there, but also like major international galleries.

Lee Minetree 16:34

It's a major, major thing. That brings up, did you see the number of galleries that came out here during COVID? No, but unbelievable. All the art galleries. All the art galleries followed everybody out here like never before. Yeah, that's interesting. Never before.

Dave Rattiner 16:49

Yeah. Well, it's so I mean you go to this I I you know, I I I I know a little bit about the art business. And um you go, this is like you if you're an art gallery, you sort of have to be at this fair, especially locally. And it's so funny, like you walk around and you'll see a painting that's like $180,000 or something in it. It'll maybe like a red dot indicating it's sold. Like, it's a big business. They really sell a lot of art out here. It's it's wonderful. There's so many amazing local artists. So that's going on this weekend. You can also check it out just for the fun of it. If you're not in the market to buy art, it's just a good thing to go to and buy a ticket to. And um, it's not expensive to go to.

Andrew Doud 17:27

So that's what's going on this weekend. Nice. Uh we also want to get a check of the numbers. This is uh residential. This is residential, yeah.

Steve Glick 17:37

So over the past week there were 48 listings that went into contract from West Hampton to Montauk. And when you compare it to 2020, there were 72 listings that went into contract. So you look at the past year, that's a decrease of 33 percent. But last year, it was very busy out here. But 48 number 48 listings is it's very strong. We've been seeing a lot of 30. So this is we're now seeing this uptick, and we we typically see that um in the third quarter coming in coming in strong.

Lee Minetree 18:04

And there are a couple big ones.

Steve Glick 18:06

Yeah, there was a lot of big ones that went into contract. The breakdown, there was you know, one over twenty million, four between ten and twenty million, four between six and eight, one between four and six, nine between two and four, and twenty-nine under two million. And we're starting to see that you know, everyone was enjoying their summer. Now, towards the end of the summer, they're now focusing on say, hey, I want to be here year-round, I don't want to rent, I wanna I want to purchase something. So that's why we're seeing this uptick. And I'll I'll I wouldn't be surprised over the next upcoming weeks, we're gonna see some some a lot more listings going into contract. When you compare it to 2019 on a normal year, there were only 18 listings that went into contract. So from 2021 at 48, 2019, 18, that's an increase of 167 percent from 2019. So it's definitely strong to see. However, inventory. It seems to be um an issue out here. There are only 25 new listings that came onto the market. So with 48 going into contract, that decreases the overall inventory of the Hamptons by 23 listings. Okay. Um the breakdown of those 25 new listings that came onto the market, there was one over 20 million, one between 10 and 20 million, four between four and six million, nine between two and four million, and only ten million under two million that came onto the market. So this has been the narrative. Um, you know, inventory is low. So if if the inventory was high, there would be more listings going into contract. So it's reflective of what's going on in the market. So even though um it's a low inventory, the 48 number is still very strong, and we just um it's a great time to list your home. There you go.

Dave Rattiner 19:42

It's never been better. There's never been a better time in the history of of the Hamptons to list your home. Yes. Perfect.

Andrew Doud 19:50

Lee, thank you so much for joining us. Thank you. Uh once again, the Happening in the Hamptons podcast is sponsored by New York Title Abstract, The Hamptons leading title insurance firm. Visit New YorkTitle.com or titleinsurance.com. I'm Andrew Dowd. Enjoy your Labor Day. Thanks so much for listening, and that is what's happening in the Hamptons.