Luxury real estate steals most of the attention out East, but there’s a different story playing out just off the front page. Walk down Main Street, and you’ll spot it — instead of just big beach houses, the landscape is changing with new marinas, medical spaces, boutique hotels, hospitality projects, and mixed-use buildings popping up almost overnight. Investors aren’t here just for the summer anymore; they’re betting the Hamptons have staying power, that this place can keep humming all year long.
Brands keep moving in, private equity is circling, and local business owners are fighting hard for the few available spaces left. Commercial real estate has started to look like the region’s truest barometer of the region’s growth and success. It hints at where things are headed better than any estate listing ever could. Still, the market isn’t just smooth sailing. There’s barely any inventory left, zoning is tight, and not nearly enough housing exists for the workers who keep everything running. Infrastructure’s stretched thin, as well.
So what’s actually next for the East End? To find out, we spoke to two agents who specialize in the commercial sector of the Hamptons: Jeffrey Sztorc at Compass, and Lee Minetree of Saunders & Associates. Their take? Investors are doubling down, competition is fierce, but a few opportunities remain for those moving fast. And if you want a sense of what the next chapter might look like in the Hamptons, these are the pros watching it unfold, deal by deal.
Jeffrey Sztorc, Compass
The Hamptons have traditionally been known for luxury residential real estate. How has commercial real estate evolved into an investment opportunity, and what types of assets are attracting the most attention today?
Commercial real estate opportunities have been attractive out here for decades. Similar to residential, a lot of the long-time owners are very happy they bought “back in the day” given the substantial appreciation of quality assets through the years in the Hamptons. Covid also shook things up in a positive way. Retail leasing in the core downtowns has been stronger than ever for the past five years. On the sales side, some of the more attractive deals we are working on are retail, mixed-use, restaurants, marinas, hotels, multi-family, industrial, and others. Investors out here are looking for value-add deals and repositioning properties.
Are investors coming from New York City, Florida, or are you seeing more local buyers?
A mix of buyers. Mostly local and New York City/Long Island. In addition: Florida and New England. Really from all over the U.S. Some great groups from California as well. And international groups.
Jeff, your background in construction and development gives you a perspective different from that of many brokers. When you look at a commercial property, what opportunities do you see that others might overlook?
There are a few key variables with each project. Some projects are obviously unique and exciting, whereas others require more work to realize the full value. Given the breadth of our team’s experience, our instincts can give immediate reads on the desirability and value of a commercial property out here. We also know exactly how to build a “dream team” for a project. The right attorney, architect, and builder can make a world of difference. Our knowledge base and market data that we’ve transacted is second to none for this commercial market.
Some of the biggest commercial transactions on the East End have involved repositioning older properties into modern retail, wellness, hospitality, or mixed-use destinations. Do you see that trend continuing?
Yes, but very selectively. Given zoning restrictions and general inventory, this can’t happen anywhere out here.
Which sectors do you think have the most room for growth over the next five years?
We are in a supply-constrained market. So the most desirable properties out here are few and far between, which get into bidding wars. To answer your question, there are office properties that need to be repositioned in the coming years. This sector has the most room to grow, whereas a lot of the other commercial asset types are in very strong demand. There will also be some exciting new retail, restaurant, and hospitality properties that will see renovations and repositioning in the next two years. Influential properties that are being reimagined as we speak.
Commercial real estate is often viewed as a barometer of the local economy. What are today’s buyers and tenants telling you about where the Hamptons economy is headed?
The long-term steady growth curve of the Hamptons market will continue. It’s a magical place, and people keep coming to the towns. Unique new brands are coming out and activating projects, which is great to see. I see the Hamptons economy as robust due to the demand profile.
If you could give one piece of advice to someone considering investing in commercial real estate on the East End today, what would it be?
Call us. We have the best information.
If you could redesign one aspect of the Hamptons commercial landscape over the next decade, whether it’s retail, office, hospitality, mixed-use, or industrial, what would you change, and why?
Some of the zoning codes in the towns are quite antiquated. And sometimes the general laws shouldn’t apply to a specific property. There are commercial properties that have issues, and owners struggle for years. And with these properties, a minor repositioning and consideration with the town would activate a site that is otherwise an eyesore in a key downtown location. The local codes can feel unnecessary and not applicable sometimes to these struggling assets.
Lee Minetree, Saunders & Associates
How would you describe the state of the Hamptons commercial real estate market today compared to five or ten years ago? What’s changed the most that the average person may not notice?
The Hamptons commercial market remains very active, but there is less inventory, particularly in the village retail rental markets. Covid was a major catalyst for Hamptons real estate, both residential and commercial. Retail benefited, as did the medical office sector, with New York City hospital systems expanding their presence on the East End. What the average person may not realize is just how much corporate acquisition activity is taking place behind the scenes.
What types of commercial properties are seeing the strongest demand right now, and which sectors are facing the biggest challenges?
Village retail, medical office properties, marinas, cannabis, and hospitality assets are all seeing strong demand. Private equity is also actively acquiring local service businesses. The large-office market has faced the greatest pullback, largely because remote work has changed how much traditional office space companies need.
Main Streets across the Hamptons continue to evolve. What kinds of businesses are succeeding today, and what qualities do successful tenants have in common?
Luxury retail has always had a presence in the Hamptons, but those brands are now making longer-term commitments. They are signing extended leases and, in some cases, purchasing properties. Major hospitality brands and developers are equally active. The businesses succeeding today recognize the long-term value of a Hamptons presence and are prepared to invest accordingly.
You’ve worked on many of the East End’s major commercial transactions. What do buyers and investors look for today that they weren’t prioritizing ten years ago?
Ten years ago, few people were looking for pickleball or padel courts. Cannabis is now an allowed use in Southampton Town. Today, demand for properties that can accommodate those uses is significant. Marinas are also highly sought after, and we are seeing more corporations and investment partnerships enter the market. Meanwhile, the strength of the retail rental market has reduced the number of available pop-up spaces, even though demand for them remains extremely high.
What are the greatest challenges facing the Hamptons commercial market in the years ahead?
The biggest issue will be housing for the people who work in and support local businesses. Labor is already a major challenge because living costs are so high here. The “trade parade” gets worse every year and has become a year-round problem; even the back roads are now congested. If nothing changes, it will eventually become a deterrent to both the commercial and residential markets.
If someone asked you to describe the health of the Hamptons economy using only the commercial real estate market, what story would you tell?
The commercial market tells a story of strong demand and limited supply. There is enormous value in having a visible presence in the Hamptons, particularly during the summer, and major brands and investors continue to pursue that exposure. At the same time, serious issues involving housing, labor, and traffic could constrain future growth if left unaddressed.
