People's Arc of Suffolk sells Bohemia headquarters, buys new office in Centereach

A Suffolk County nonprofit serving thousands of Long Islanders with disabilities has sold its Bohemia headquarters and will move into a Centereach office building. People’s Arc of Suffolk County, which purchased the building last week, said its move is in line with the agency's efforts to bring services closer to clients.

People’s Arc, formerly known as AHRC Suffolk, purchased its future headquarters at 2100 Middle Country Rd. for $7.2 million, said CEO John McGuigan.

"We very deliberately used the real estate transaction as a catalyst" toward implementing the nonprofit’s community-focused plan, he said. The nonprofit also sold its longtime office at 2900 Veterans Memorial Hwy. in Bohemia for $9.15 million.

Dunkirk Realty, a Plainview-based commercial real estate investment firm, purchased the 74,000-square foot multiuse Bohemia property, which includes a nearly 39,000-square-foot warehouse and 35,000 square feet of office space.

Albert Macanian, Dunkirk’s president, said he plans to lease the industrial space to a manufacturer and invest more than $2 million to convert the offices into industrial or research and development space, pending approval from the Town of Islip.

The sale price, Macanian said, reflects a deal to lease the office space back to People’s Arc at a discounted rent while it prepares to move to Centereach. He said he hopes interest rates drop to enable the renovations.

"Our business all depends on the interest rate," he said. "The lower the interest rate, the more we can invest in the building.

In Centereach, People’s Arc bought the former Key Bank building from Jericho-based GAZ Realty Properties, which owns office and retail properties in Nassau and Suffolk.

George Abi Zeid, the company’s president and CEO, did not return a phone call seeking comment.

GAZ Realty agreed to lower its price for the recently renovated 58,000-square-foot building on 5.1 acres by making an in-kind donation of a portion of the space to People’s Arc, McGuigan said.

Investors have become more selective in purchasing office buildings given today’s higher costs to borrow money, but Long Island’s office market has fared better than other markets around the country because of a diverse range of tenant types and limited new construction, said Jared Koeck, associate director of market analytics at CoStar Group, a commercial real estate data provider.

While it can be more difficult to sell older office buildings with fewer amenities, these buildings often can attract tenants looking to save on rent, such as smaller law firms, medical offices and nonprofits.

"These buildings serve an important purpose because there are different tiers that tenants are willing to pay as far as rent is concerned," Koeck said.

Branching out

As it downsizes its headquarters, People’s Arc has opened smaller satellite locations, including a performing arts center in Northport and nature-focused community center in Sayville.

This year, People’s Arc has opened sites in East Islip, Lake Grove and Islandia with plans for a future location in Patchogue to serve its "Program Without Walls," which offers community-based volunteer and recreational opportunities for people with disabilities. It has moved away from a model where clients travel to a centralized hub like the Bohemia location.

"If we're going to be a community-focused organization, helping people develop relationships outside of their own communities doesn't make a ton of sense," McGuigan said. "We wanted to go in a different direction."

The nonprofit offers adult day programs, children’s services, housing and employment programs to about 2,500 people with intellectual and developmental disabilities annually.

People’s Arc plans to spend about $3.5 million on renovations to the Centereach office before moving staff and clients there next year.

The Bohemia building included a sheltered workshop where people with disabilities manufactured items for a small stipend; the nonprofit ended the program in 2022

That led to the nonprofit’s decision to sell two years ago after determining it would take up to $5 million to renovate the facility to meet its future needs. The building also cost more than $1 million annually to operate, including substantial heating and cooling costs, McGuigan said.

He said the nonprofit wanted a more welcoming site for clients after receiving feedback from families that they didn’t like the industrial setting.

"Not only is it more immediately economically viable, it's also future-proofing us against a group of people that might not choose our services had we left them as they were," McGuigan said.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.