The Blueprint:
- Ares Industrial Real Estate Income Fund is developing two speculative warehouse projects in North Bellport and Yaphank.
- Brookhaven Industrial Development Agency denied tax breaks for the North Bellport project due to the absence of secured tenants.
- Industrial vacancy rates in eastern Suffolk are higher (8.2%) compared to western Suffolk (3.4%) as of Q4 2025.
Despite a rare rejection for IDA benefits, a global investment firm has begun work on two speculative industrial projects on Long Island.
Ares Industrial Real Estate Income Fund (AIREF), a subsidiary of Ares Management Corporation, is performing site-clearing work for a project that will bring four warehouse buildings totaling 528,000 square feet to a 52-acre site on the east side of Station Road, south of Woodside Avenue and north of Sunrise Highway in North Bellport.
The developer is also planning to build a 332,970-square-foot warehouse and distribution building on a 25.6-acre site in Yaphank. The wooded property is bordered by the Long Island Rail Road to the north, Station Road to the west and the sports complex Baseball Heaven to the east.
Though the Town of Brookhaven has approved both projects, the Brookhaven Industrial Development Agency denied AIREF’s 2024 bid for tax breaks for the North Bellport project, because the developer had not yet secured tenants to occupy the buildings. After the denial, AIREF did not apply for IDA benefits for the Yaphank project.
“Our board has a moratorium on spec industrial projects,” Lisa Mulligan, Brookhaven IDA CEO, told LIBN. “If they had an end user, we’d be happy to work with them.”
AIREF officials were unable to be reached for comment.
While industrial leasing activity remains robust throughout most of Nassau and Suffolk counties, some new spec developments in eastern Suffolk have been slower to find tenants. The overall vacancy rate for Long Island industrial real estate was 5 percent at the end of last year, though the industrial vacancy rate in eastern Suffolk was 8.2 percent, according to a report from Cushman & Wakefield.
Brokers acknowledge that there are definitely more vacancies at industrial properties east of Veterans Memorial Highway (Route 454) than to the west. In fact, the vacancy rate for western Suffolk was just 3.4 percent in Q4 2025.
“Western Suffolk County offers a sweet spot for multi-tenant complexes between 10,000 to 25,000 square feet,” said Gary Chimeri, principal of Paramount Properties Group, who sold both the North Bellport and Yaphank parcels to AIREF. “As you push east of 454, you will find the vacancy rate doubles as only a handful of Long Island companies can afford to buy and fulfill this type of new product, hence the presence of institutional financing.”
An outlier of that trend is the easternmost area of Suffolk. Mostly due to a growing demand amid a lack of product. The East End has a lower vacancy rate that even Nassau, which had an industrial vacancy rate of 5.2 percent in Q4 2025.
“Once you get to the commercial areas serving the North Fork and South Fork, the vacancy rate goes back down to 3.4 percent,” said David Pennetta, executive managing director for Cushman & Wakefield. “Now that we have year-round residents on both forks, Calverton and Westhampton are the last two industrial areas serving the East End.”
But brokers agree that finding appropriate tenants for new spec developments to the east of central Suffolk have been difficult to attract.
One of the last spec industrial projects that received economic incentives before the Brookhaven IDA put its moratorium in place was a three-building development totaling about 550,000 square feet from Manhattan-based Wildflower Ltd. and Barings called the Brookhaven Logistics Center. The $162 million project that was built on a 42.1-acre portion of a 71.4-acre parcel of vacant land west of Sills Road on the north side of Long Island Expressway. The spec development has yet to be filled.